China Caixin/Markit PMIs for October

Composite 49.9

  • prior was 48.0

Services 52.0

  • prior was 50.5

Key points from Markit:

  • Growth of services activity picks up, but manufacturing output falls further
  • Composite new orders rise for first time in three months
  • Services confidence drops to record low

Comment from Dr. He Fan, Chief Economist at Caixin Insight Group:

  • "The Caixin China Services PMI is 52.0 for October, up significantly from 50.5 the previous month. The Caixin Composite Output Index reached 49.9, also much higher than 48.0 in September, close to the neutral 50-point level.
  • This shows that previous stimulus policies have begun to take effect, while the economic structure steadily improved.
  • The economy has started to show signs of stabilizing, reducing the need for a further stimulus.
  • The government must be resolute and push forward the reform agenda in a well-rounded manner to release the long-term potential for sustainable economic growth."

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Better PMI survey data from China should be a positive, though this is not nearly as closely watched as the manufacturing PMI.