China Caixin PMI Services dropped to 52.5 in December, down from 53.5, missed expectation of 53.2. PMI Composite fell fro a 21-month high of 53.2 to 52.6. Markit said December saw softer, but still strong, rise in business activity. Total new work continued to rise solidly. Output charges rose in manufacturing sector, but fell at services companies.
Commenting on the China General Services PMI™ data, Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said: “The Caixin China Composite Output Index dropped to 52.6 in December from 53.2 in the previous month. Rates of expansion in both the services and manufacturing sectors moderated. However, China’s overall economy continued to stabilize. The gauges for new orders, employment and output prices all remained in positive territory despite modest drops. It is difficult for the measure of business confidence, which remained at a relatively low level in December, to improve. That has become a major hurdle to stabilizing the economy. Looking forward, the phase one trade deal between China and the U.S. should be able to help corporate sentiment recover. China’s economy is likely to get off to a quick start in 2020, but it will still be constrained by limited demand for the rest of the year.”
