Activity of the service sector in China at the lowest level of the year

The leading indicator, which is considered a barometer of activity in China’s service sector, fell to its lowest level of the year as service exports contracted.

China’s general services purchasing managers’ index (PMI) from economic and financial news service Caixin fell 2.3 points on-month to 51.8 in August. Although the index was around 50 points, it fell to the lowest level of the year due to the contraction of exports of services.

Despite the increase in general demand for services in August, new export demands slowed and contracted due to weak external demand.

Although labor capacity and employment increased in the sector, prices remained stagnant due to low inflation.

The index, which was below 50 in the last 4 months of 2022 due to the effect of the Covid-19 restrictions, once again exceeded the growth threshold with 52.9 in January of this year, 55 in February, 57, 8 in March, 56.4 in April, 57.1 in May and 57.1 in June, continuing its expansive trend with 53.9 and 54.1 in July.

The index, based on the results of surveys sent by the market data services company IHS Markit to purchasing managers of more than 400 companies operating in the service sector in China, is considered a barometer of economic activity in the sector.

RECOVERY IN THE MANUFACTURING SECTOR

The PMI manufacturing index, announced by Caixin on September 1, rose from 49.5 in July to 51 in August, surpassing the growth threshold for the first time since February.

The PMI manufacturing industry index from the National Statistics Office (UIB), which includes more industrial establishments, was 49.7, indicating the continuation of the 4-month contraction trend.

The UİB non-manufacturing PMI decreased 0.5 points to 51. (AA9