Caixin services PMI slows in June 
2019-07-04
China’s services activity eased further in June to reach its lowest level since March, according to a private report yesterday.
The Caixin China General Service Purchasing Managers’ Index fell to 52 last month from 52.7 in May, according to a survey by financial information service provider Markit and sponsored by Caixin Media.
A reading above 50 signals growth while one below 50 means contraction.
The report said the modest rate of expansion was the slowest since February.
“The gauge for new business rebounded and was higher than the levels seen for most of last year, likely due to the re-acceleration of fiscal policy support,” said Zhong Zhengsheng, director of macro-economic analysis at CEBM Group. “New export business returned to contractionary territory, pointing to subdued foreign demand.”
Zhong also pointed out that the employment measure fell further but remained in positive territory, suggesting that the capacity of the services sector to absorb labor had weakened. Gauges for input costs and prices charged by service providers both fell but stayed in expansionary territory, with the former still higher than the latter, showing that services companies remained under significant cost pressure.
The measure for business activity expectations rebounded slightly but remained at a relatively low level, a reflection that companies’ confidence in future prospects remained subdued.
The Caixin China Composite PMI data, which covers both manufacturing and services, showed that business activity in China rose only marginally overall. The rate of expansion slowed to the weakest since last October, as signaled by the Composite Output Index edging down from 51.5 in May to 50.6 in June.
In comparison, the official general PMI released on Sunday dipped 0.3 points to 53. The manufacturing PMI remained flat at 49.4 in June, while the non-manufacturing PMI slipped 0.1 point to 54.2.
The lower composite PMI reading was driven by falls in the sector headline readings for both services and manufacturing, the report said.
Total new business at the composite level also rose at a softer pace in June compared with May. Composite data indicated a second consecutive fall in job numbers across China’s private-sector economy. 
