China Caixin / S&P Global non-manufacturing PMI for May: 57.1 (vs. expected 55.2)

China Caixin / S&P Global PMIs for May:

Services a solid beat at 57.1, fifth consecutive month of expansion

• expected 55.2
• prior 56.4

Composite 55.6

• prior 53.6

In brief from the report:

• Both services supply and demand expanded further
• gauges for business activity and total new orders both stood above 50 for the fifth consecutive month and logged their second-highest readings since November 2020
• External demand also maintained strong momentum, with the measure for new export orders staying in expansionary territory for five months in a row
• Employment in the services sector saw a marginal expansion
• In May, the gauge for input costs remained in expansionary territory for the 35th consecutive month due to elevated labor and raw material costs. The reading for prices charged to customers stood above 50 for the 13th month in a row as market demand remained strong. Like most of the previous months in recent years, input costs increased at a faster pace than prices charged in May

This is an encouraging data point from China. Chinese authorities are facing high youth unemployment and will be kleen not to see this grow. There is more policy work to be done here.

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I posted the below earlier ICYMI:

China's National Bureau of Statistics (NBS) published its services PMI last week. As background to this second PMI due today, 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.

• The official PMI survey covers large and state-owned companies, while 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.

Last week Caixin / S&P Global published its manufacturing PMI for May. As an illustration of how different the two surveys can be (NBS vs. Caixin) this one was expansionary, in contrast to the very disappointing official PMI:

• China Caixin Manufacturing PMI for May: 50.9 (expected 49.5)
• China Official May PMIs: Manufacturing 48.8 (expected 51.4) Services 54.5 (expected 54.9)