China Caixin / S&P Global PMIs for May:
Services 53.9, sixth consecutive month of expansion
- prior 57.1
Composite 52.5
- prior 55.6
Earlier in the week we had the Caixin manufacturing PMI, dropping from May but still in in expansion:
And, last week were the official PMIs from the National Bureau of Statistics (NBS) survey:
China has two primary Purchasing Managers’ Index (PMI) surveys – the official PMI released by the National Bureau of Statistics (NBS) and the Caixin China PMI published by the media company Caixin and research firm Markit / S&P Global.
While the NBS’ PMIs cover large and state-owned companies, the Caixin PMI survey covers more small and medium-sized enterprises. As a result, the Caixin PMI is considered to be a more reliable indicator of the performance of China’s private sector. Another difference between the two surveys is their methodology. The Caixin PMI survey uses a broader sample of companies than the official survey. Despite these differences, the two surveys often provide similar readings on China’s manufacturing sector.
Commentary on the Composite PMI, in brief:
- Production, demand, exports and employment all expanded, but at a mild pace
- A slew of recent economic data suggests that China’s recovery has yet to find a stable footing, as prominent issues including a lack of internal growth drivers, weak demand and dimming prospects remain
- In June, Caixin China PMIs showed that conditions in the manufacturing sector lagged far behind services. Employment contracted, deflationary pressure mounted, and optimism waned in the manufacturing sector. Meanwhile, the services sector continued a post-Covid rebound, but the recovery was losing steam.