In September, Caixin'S Service Industry PMI Rose To 54.8

With the accelerated recovery of domestic service industry, the Caixin China general service industry business activity index (PMI) of China's general service industry published on October 9 recorded 54.8, 0.8 percentage points higher than that of August, and was in the expansion range for five consecutive months.

Previously released Caixin China's Manufacturing Purchasing Managers Index (PMI) recorded 53 in September, down 0.1 percentage point from August. As a result, Caixin China's comprehensive PMI fell 0.6 percentage points to 54.5 in September.

This trend is not consistent with the Bureau of statistics PMI. The National Bureau of statistics released the business activity index of the service industry in September rose 0.9 percentage points to 55.2, while the comprehensive PMI rose 0.6 percentage points to 55.1.

The index of new orders in the service sector rose slightly in September and remained in the expansion range for five consecutive months. The survey sample shows that the market situation is stronger and the development of new projects helps boost sales. The composite new order index continued to improve, supported by the rising orders in both the service and manufacturing sectors.

The index of new export orders of service industry was in the contraction range for three consecutive months, and the decline rate was slightly larger than that in August. Some enterprises interviewed reported that the epidemic continued to impact on export sales. In September, the new export order index of manufacturing industry recorded the highest since September 2017, driving the composite new export order index into the expansion range for the first time since this year.

With the recovery of the market, service enterprises increased employment for the second consecutive month, and the employment index was in the expansion range for two consecutive months, but it was only slightly higher than the boom and bust line. In September, the employment index rose to the expansion range, but the growth rate was slight. Overall, the overall employment scale of the two industries continued to expand.

The increase in new orders led to a return to the expansion range of the backlog index of service enterprises in September, but the growth rate was slight. The backlog of manufacturing enterprises continued to rise, driving a small increase in the comprehensive backlog.

Due to the increase of labor, transportation and raw materials costs, the price of service inputs continued to rise in September, and the enterprises reflected that the overall cost increase was only slight. The purchasing price index of raw materials in the manufacturing industry has been in the expansion range for four consecutive months. The comprehensive input cost continues to rise.

In September, service industry charges rose for the second consecutive month, but some respondents said that there was limited room for price increases to attract new orders. Manufacturers continued to raise prices slightly, less than in August. Composite output prices continued to rise, but only slightly.

In September, the expansion of small businesses was roughly the same as the long-term average. China's service industry enterprises continue to be optimistic and expect business activities to grow in the coming year. It is generally believed that once the epidemic is over, the global economic situation will be stronger and the demand of customers will rise.

Wang Zhe, a senior economist at Caixin think tank, said that at present, the economic operation is still in the recovery period after the new epidemic, and the recovery speed is still accelerating. After the outbreak, employment in manufacturing and service industries improved simultaneously for the first time, but the strength was not strong, and the employment situation was still not too optimistic. For some time to come, there will still be great uncertainties in the recurrence of overseas epidemics and the US election, and the construction of a new development pattern of mutual promotion of domestic and international dual circulation is still facing great challenges.