In November, Caixin'S Service Industry PMI Rose To 57.8, And Employment Improved Significantly

With the production and living order gradually returned to normal after the epidemic, the domestic service industry continued to accelerate the recovery. The Caixin China general service industry operating activity index (PMI) of China's general service industry published on December 3 recorded 57.8, 1 percentage point higher than that in October, the second highest value since May 2010, second only to June 2020.

Previously released, Caixin's purchasing managers' index (PMI) of China's manufacturing industry recorded 54.9 in November, 1.3 percentage points higher than that in October, reaching a 10-year high. Driven by this, the comprehensive PMI of Caixin China increased by 1.8 percentage points to 57.5 in November, the strongest growth rate since March 2010.

The trend of service industry and comprehensive PMI is consistent with that of the Bureau of statistics. In November, the National Bureau of statistics released the business activity index of the service industry rose 0.2 percentage points to 55.7, while the comprehensive PMI rose 0.4 percentage points to 55.7.

Since 2010, PMI has not continued to accelerate the pace of service industry expansion and service industry to the highest level in May, respectively.

The recovery in external demand is also strong. In November, the index of new export orders of the service industry was significantly higher than the boom and bust line, which was the first growth after June, and reached the highest growth rate after April 2019. The survey sample enterprises generally reflect that in the context of the continuous recovery of the overall market situation, the number of customers at home and abroad has increased. This shows that although the epidemic situation in foreign countries is not clear, the export demand is still significantly improved.

The high momentum of both supply and demand of the service industry is transmitted to the employment market, boosting the employment index of the service industry to maintain expansion for four consecutive months. Employment expansion accelerated in November, and the employment index reached a new high since November 2010. Meanwhile, the manufacturing employment index has been in the expansion range for three consecutive months, with the highest value since June 2011 in November. On the whole, thanks to the recovery of supply and demand, the employment of enterprises in the two industries is steadily increasing.

The average operating costs of service enterprises further increased, significantly higher than that in October, reaching the highest record after August 2010. According to reports, the increase in input costs is generally due to the rise in raw material costs and labor costs.

Under the background of stronger demand, service enterprises can raise the price of charges, thus transferring the pressure of rising input cost to customers. In November, the service industry input and fee index both rose in the expansion range, recording the highest values since September and March 2010 respectively, and the inflation pressure began to show.

Entrepreneurs are extremely optimistic about the economic prospects. In November, the business expectation index of service industry rose to the highest value since May 2011, exceeding the long-term average. Enterprises generally expect that in the coming year, the global economic situation will recover from the epidemic situation, domestic demand will be stronger, and new products will be listed, which is expected to drive the growth of business activities.

Wang Zhe, a senior economist at Caixin think tank, said that in November, the overall recovery pace of manufacturing and service industries continued to accelerate, both sides of supply and demand improved simultaneously, overseas demand continued to expand, and employment improved significantly. With strong market demand, the manufacturing industry began to take the initiative to replenish inventory. The price indexes at both ends of costs and charges rose, and the entrepreneur confidence index remained high. Economic recovery in the post epidemic era is expected to continue for several months. At the same time, many uncertain factors still exist in the internal and external environment, and the gradual withdrawal of the relevant loose policies during the epidemic period needs more stable design.