In March, Caixin China'S Service Industry PMI Rose To 43, The Lowest In History.

The impact of the new crown epidemic on the service sector continues. The April 3rd Caixin China general service industry activity index (PMI), released in March, recorded 43, although it rose 16.5 percentage points compared with February, but it is still in the contraction area, which is the lowest value since November 2005.

Previously announced in March, Caixin China manufacturing PMI rose 9.8 percentage points to 50.1, two industries PMI double picked up, driven by the March Caixin China comprehensive PMI recorded 46.7, a sharp rise of 19.2 percentage points.

This trend is consistent with the Statistics Bureau PMI. In March, the National Bureau of Statistics announced a 51.8 increase in business activity index, a 21.7 percentage point rise, and a combined PMI rose by 24.1 percentage points to 53.

Domestic and foreign demand for services continued to shrink. In March, the new orders index and the new export orders index of the service industry rebounded significantly from last month's historical lows, but they are still at a historically low level. The new orders index for manufacturing industry also rebounded in the contraction area. On the whole, the total volume of new orders and new comprehensive export orders rebounded in the contraction area.

The service industry has been reducing employment for two months in a row. The decline in employment in March was larger than that in February. According to the respondents, part of the reason is voluntary turnover of employees. Enterprises also take into consideration the prospect risks and adopt measures to reduce costs. The employment index of manufacturing industry rose sharply in the contraction area. On the whole, the total number of employment in the two industries decreased for third consecutive months, but the decline narrowed compared with February.

Insufficient demand has led to a repeat decline in the volume of backlog services in the service sector, the highest since October 2015. The backlog business volume of manufacturing industry rose sharply, and the volume of comprehensive backlog business increased further.

After a sharp decline in February, the price of services in March rebounded slightly. This is mainly due to the increase in overtime pay and the need for enterprises to purchase anti epidemic equipment for their employees. The purchase price of raw materials for manufacturing industry returned to the contraction zone, but the decline was slight. The two are integrated and the cost of comprehensive input has increased.

In order to boost sales, service enterprises continue to lower the charging price, and manufacturers generally lower the price of products, resulting in the most significant decline in the overall output price since 2016.

The optimism of the service industry is still low, only a slight rise from the previous month's low level. The industry is generally worried that the new crown will continue for a long time. Manufacturing optimism is down slightly from its five year high in February.

Zhong Zhengsheng, chairman and chief economist of the new financial think-tank, said that although the epidemic was under control in March, the recovery of economic activity was still limited, and the GDP was expected to increase significantly in the first quarter, which raised the requirements for this year's growth target to be appropriately lowered and the subsequent countercyclical efforts in areas such as consumption and infrastructure.