In March, Caixin'S Service Industry PMI Rose Sharply To 54.3, And Employment Returned To Expand

With the end of local epidemic situation in autumn and winter and the release of consumer demand, the expansion of service industry has accelerated significantly. The Caixin China general service industry business activity index (PMI) of March, released on April 6, rose sharply by 2.8 percentage points to 54.3, which was in the expansion range for 11 consecutive months and ended the downward trend of the previous three months.

The Caixin China Manufacturing Purchasing Managers Index (PMI) in March, previously released, fell 0.6 percentage points to 50.6, the lowest since May 2020. Driven by the recovery rate of service industry PMI significantly greater than the slowdown rate of manufacturing industry, the comprehensive PMI of Caixin China recorded 53.1 in March, up 1.4 percentage points from the previous month, indicating the steady growth of China's overall production and operation activities.

The trend of PMI and PMI of service industry is consistent with that of Statistics Bureau. The business activity index of service industry in March, released by the National Bureau of statistics, rose 4.4 percentage points to 55.2, and the comprehensive PMI increased by 3.7 percentage points to 55.3.

The supply and demand of service industry continued to expand for 11 consecutive months, with a sharp rebound compared with the previous two months. With the end of local epidemic situation in autumn and winter, the service industry recovered rapidly and supply and demand increased simultaneously. Survey sample enterprises generally said that the further recovery of market conditions after the epidemic has boosted the number of new projects and customers.

Compared with strong domestic demand, external demand still needs to be improved. In March, the index of new export orders of service industry was in the contraction range for the second consecutive month, but the contraction range was limited. Some enterprises reported that the epidemic continued to suppress new overseas orders. The new export business decreased slightly, indicating that the growth momentum was mainly due to the strengthening of domestic demand.

As the market improves, employment in the service sector has improved significantly. The employment index of the service industry has risen by more than 3% compared with the previous month, returning to the expansion range. Nevertheless, the increase in the number of labor is still not enough to absorb the influx of new orders, and the backlog in the service industry increased slightly in March.

The service industry price index remained high in March. Rising raw material prices, rising human costs and rising energy prices have boosted the service industry's input price index to be in the expansion range for nine consecutive months. Driven by the cost, the service industry's fee price index is in the expansion range for the eighth consecutive month, and the inflation pressure continues to increase.

Service entrepreneurs have high confidence in future economic recovery and epidemic control. In March, the service industry business expectation index reached a new high since March 2011.

Wang Zhe, a senior economist at Caixin think tank, said that the economic recovery after the Xinguan epidemic still continued. In March, supply and demand of manufacturing and service industries were in the expansion range. However, affected by the end of the local epidemic in autumn and winter, the marginal improvement speed of the two industries was differentiated: the recovery rate of the manufacturing industry decreased for the fourth consecutive month, while the service industry rebounded strongly. Affected by this, employment in the service industry improved significantly in the month, while the employment market in the manufacturing industry was obviously under pressure. Inflation is still the focus of attention in the future. The price index of manufacturing industry and service industry on cost side and charge side has been rising for several months. The pressure of inflation is becoming more and more prominent, which restricts the space for future policy and is not conducive to the sustained recovery of the economy in the post epidemic period.