Data Analysis: In January 2021, Caixin'S Service Industry PMI Dropped To 52

Affected by repeated outbreaks at home and abroad, the service industry has maintained a recovery trend, but the speed has slowed down significantly. The Caixin China general service industry business activity index (PMI) of January 2021 released on February 3 recorded 52, a sharp decrease of 4.3 percentage points compared with the previous month, and the lowest in nearly nine months.

Previously released Caixin's purchasing managers' index (PMI) of China's manufacturing industry in January 2021 was 51.5, down from 1.5 percentage points last month. PMI of manufacturing and service industries both declined, which dragged Caixin China's comprehensive PMI to 52.2, down 3.6 percentage points from the previous month, indicating that the overall output growth rate was only a small increase, the lowest since May 2020.

The trend of service industry and comprehensive PMI is consistent with that of the Bureau of statistics. In January 2021, the business activity index of service industry published by the National Bureau of statistics decreased by 3.7 percentage points to 51.1, and the comprehensive PMI fell by 2.3 percentage points to 52.8.

The supply and demand sides of the service industry continued to expand, but the speed slowed down. In January 2021, the service industry business activity index, new order index and new export index fell simultaneously for the second consecutive month, reaching new lows in nearly nine months, five months and three months respectively. Some of the enterprises interviewed said that the scene of the service industry continued to improve, while some enterprises believed that the recurrence of the new epidemic situation at home and abroad had a negative impact on the market.

Employment improvement in the service sector is also slowing down. Service enterprises still have the incentive to increase employment. The employment index in January was in the expansion range for the sixth consecutive month, but it was only slightly higher than the boom and bust line, which was a new low in the past six months.

The rise in the prices of raw materials in the service industry and the increase in labor and transportation costs have boosted the input prices to continue to rise and rise sharply. In January 2021, the input price index of the service industry recorded the second highest value since May 2012. Despite the rising costs, due to sales pressure, service enterprises have not substantially increased their charging prices. This month, the service industry's fee price index is still in the expansion range, but has declined from the previous high point.

Service entrepreneurs are optimistic about the overall economic recovery, but the epidemic situation is not clear, which suppresses the overall optimism. In January 2021, the service industry business expectation index drops to the lowest point in nearly four months.

Wang Zhe, a senior economist at Caixin think tank, said that in January 2021, the manufacturing and service industries were still in the recovery period on the whole, but the recovery momentum of supply and demand weakened, overseas demand became a drag, and the employment market was under pressure, and the employment situation in the manufacturing industry was particularly grim. In addition, in recent months, inflation pressure has been emerging, and the comprehensive input price index has recorded the highest value since November 2017. In the new year, the focus is on the effect of domestic epidemic prevention and control against the background of the continuous spread of the epidemic situation, as well as the cultivation of endogenous driving force of domestic economy under the situation of increasing uncertainty of overseas demand.