In April, Caixin China'S PMI Rose To 47.6, Still In The Contraction Zone.

In April, China's service industry has improved, but it is still under pressure.

The May 7th Caixin China general service industry activity index (PMI), which was released in April, recorded a 44.4 increase of 1.4 percentage points compared with March, but it is still in the contraction range, indicating that the output of service industry continues to decline and the downward rate slows down.

Previously released in April, Caixin China manufacturing PMI dropped 0.7 percentage points to 49.4, and then returned to the contraction interval. Driven by the PMI of the service industry, in April, the total PMI of Caixin was 47.6, up 0.9 percentage points, and still shrinking.

This trend is consistent with the Statistics Bureau PMI. In April, the National Bureau of Statistics announced a 52.1 index of business activities in services, an increase of 0.3 percentage points from last month, and a combined PMI rose by 0.4 percentage points to 53.4.

Domestic and foreign demand for services continued to shrink, while the total number of new orders for services in April declined for three consecutive months, but the decline narrowed slightly compared with March. Among them, the external demand dragged down, and the new export orders index of service industries dropped to the lowest level since September 2014, which is only higher than that of February. Many enterprises have reported that the epidemic has led to temporary suspension and restrictions in many countries. Affected by the decline in export orders, the new orders index for manufacturing industry also contracted for three consecutive months, continuing to decline in April. On the whole, the total volume of new orders continued to decline, and the combined new export orders fell more than in February.

The service industry has been reducing employment for three months in a row. In April, the employment index of the service industry dropped to a new low. The employment index of manufacturing industry also dropped slightly within the contraction area. On the whole, the two major industries continue to reduce employment, and the speed of attrition is faster than that in March.

After a slight increase in March, the prices of service sector inputs remained stable in April. The survey shows that the decrease in employment expenditure and the reduction of oil and diesel inputs have largely offset the increase in the cost of epidemic prevention. The purchase price of raw materials for manufacturing industry recorded the most significant decline in more than four years. The two are integrated, and the cost of comprehensive input has been reduced from rising to declining.

In order to boost sales, the service industry has lowered the charging price for fifth consecutive months. Manufacturers also continue to lower the price of products, resulting in continued decline in overall output prices.

Despite the poor performance of the service sector, the optimism of the business sector has risen to a three month high. The industry believes that once the epidemic improves, the service industry will recover. Manufacturing optimism dropped to a four month low.

Zhong Zhengsheng, chairman and chief economist of the new financial think-tank, said that the Chinese economy suffered a more severe export shock in April, which had a chain reaction to residents' income, consumption and business investment. Domestic consumption is not yet fully launched, and infrastructure construction is not enough to hedge foreign demand plummeting. The economy is still in a further downward trend. In April 17th, the Politburo of the Central Committee set the tone to "hedge the impact of the epidemic with greater macroeconomic policies". The package of macroeconomic stimulus packages including enterprise relief, investment acceleration, consumption promotion and employment protection came out.