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Free AccessChina Caixin Sept Services PMI Softens To Lowest In 21 Months
BEIJING (MNI) - The expansion in the Chinese services sector decelerated in
September, as new orders and output growth decreased, according to the latest
survey of purchasing managers jointly released by Caixin magazine and Markit.
The headline index fell to 50.6 in September, down sharply from 52.7 August
and the weakest reading since 50.2 in December 2015.
Readings above 50 indicate expansion in the services sector, and readings
below 50 indicate contraction. The higher the PMI reading above 50, the faster
the expansion in the sector.
The rise in the Caixin index contrasted with the rise shown in the official
services PMI jointly released Sept. 30 by the China Federation of Logistics and
Purchasing (CFLP) and the National Bureau of Statistics (NBS). The CFLP/NBS
services PMI rose in September to 55.4 from 53.4 in August, back above the 54
mark.
In like fashion, the Caixin manufacturing PMI fell in September, while the
CFLP/NBS index rose sharply.
For the Caixin services PMI, a slowdown in the growth of production and new
orders were the main sources of the deceleration, and the output index also
showed sluggish.
"Service providers saw only a modest upturn in new order books. A number of
companies mentioned that relatively subdued client demand had weighed on sales
at the end of the third quarter," Caixin said.
As a result, the employment index eased for the month, Caixin said.
Services companies expanded their payroll numbers at only a marginal pace.
Input prices accelerated for the second month in a row, but the increase
was only marginal, according to Caixin. Prices charged by services companies
rose slightly because of the higher input prices, compared with a drop in
August.
The pressure on operating capacity across services companies relaxed in
September due to the slowdown in new orders, after tightening in the previous
four months, Caixin noted.
Chinese services firms expressed less confidence in their outlook for
business a year ahead, Caixin said.
Caixin's China Composite PMI, which combines the results of the
manufacturing and services surveys, fell to 51.4 in September from 52.4 in
August, the lowest in three months, indicating the growth momentum of the
economy may be slowing.
"The slowdown was driven by weaker increases in output at both
manufacturing and services companies," Caixin said.
The composite subindex for new work increased at the weakest pace since
June and input price index surged to an eight-month high, mainly in the
manufacturing sector.
"The stronger cost pressures at manufacturers led factory gate charges to
increase sharply as firms sought to protect their margins," Caixin noted,
"Selling prices at the composite level subsequently increased at the fastest
pace since last December"
"The Chinese economy generally held up well in the third quarter," said
Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, a subsidiary
of Caixin. "However, the expansion in both manufacturing and services cooled in
September, suggesting downward pressure on economic growth may re-emerge in the
fourth quarter."
--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@marketnews.com
--MNI BEIJING Bureau; +1 202-371-2121; email: john.carter@mni-news.com
[TOPICS: MAQDS$,M$A$$$,M$Q$$$,MT$$$$]
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.