SMM News: the Caixin China General Services Business activity Index (PMI) for April, released on May 6, recorded 54.5, up 0.1 percentage points from March, the second highest since June 2012, This shows that the business activities of the service industry have expanded further.
The trend of Caixin China's service industry and comprehensive PMI is not completely consistent with that of the Bureau of Statistics (PMI). The index of business activity in the service industry in April released by the National Bureau of Statistics was 53.3, and the comprehensive PMI recorded 53.4, down 0.3 and 0.6 percentage points, respectively.
Total new orders for the services sector continued to rise in April, but at a slightly slower pace than the March high. According to the enterprises surveyed, the improvement of marketing strategy, the release of new products and the improvement of market demand have led to a rebound in the total amount of new orders. Manufacturing new orders also rose slightly, with a combination of the two, with new orders growing modestly in April, slower than in March.
External demand is differentiated. New export orders for services recorded the highest growth rate since data were available at the end of 2014 in April, with many companies reflecting stronger demand in major markets and greater efforts to expand overseas markets. Manufacturing new export orders returned to the contraction range, but the contraction was more moderate, the two major industries combined, the total number of new export orders fell slightly.
Employment in the two major industries also tends to be divided. Employment in the service sector continued to rise slightly, the highest rate in 10 months, with some companies saying it was related to the increase in new orders, while manufacturing employment fell slightly again. In a combination of the two, the combined employment scale increased slightly in April, which was similar to that in March.
Input costs in the service sector continued to rise in April, the highest since October 2018. The manufacturers surveyed reported that the increase in costs was mainly related to higher raw material prices and wages. Manufacturing input costs rose only modestly. In a combination of the two industries, input costs continued to rise slightly, the highest in five months.
Both industries raised factory prices in April. According to some enterprises, this is related to stronger demand. Among them, the factory price increase in the manufacturing industry is very small. Affected by rising input costs, the service sector also continued to raise fees slightly, the highest increase in 10 months.
Amid concerns about the weakness of the global economy, confidence in the production and business prospects for the next 12 months remains relatively low. Optimism in the services sector fell to a five-month low, while confidence in the manufacturing sector rose slightly to an 11-month high, but overall remained weak.
Zhong Zhengsheng, chief economist and chairman of Monita Research, a Caixin think-tank, said the Chinese economy still showed good resilience in April, particularly in the service sector. However, the rising pressure on the cost of the service industry is greater, which suppresses the profit space, and the confidence of entrepreneurs has not improved. Patience is needed to stabilize the economy, and economic policy, in the tone of stable growth, will moderately converge counter-cyclical policies and increase the strength of structural and institutional policies.
The information is constantly updated.