China's Service Sector Expands for 14th Consecutive Month... Caixin PMI at 52.5

Decline Compared to Previous Month and Forecast
"Some Companies Confident in Future Demand Improvement"

The Chinese private sector service industry indicator, which reflects the perceived economy, has been in an expansion phase for 14 consecutive months.

On the 5th, Chinese economic media Caixin reported that the Caixin Services Purchasing Managers' Index (PMI) for February was recorded at 52.5.

[Image source=Yonhap News]

Although it fell by 0.2 and 0.4 points compared to the previous month (52.7) and the forecast (52.9), respectively, it remained above the baseline (50), continuing the expansion trend for 14 consecutive months.

The services PMI is a key leading indicator for assessing the real economy. A reading above the baseline of 50 indicates economic expansion, while below 50 indicates contraction. Since recording 52.9 in January last year, it has maintained an expansion trend for 14 consecutive months.

Corporate activity and total new orders have increased for 14 consecutive months. Service exports also rose for six consecutive months, reaching the highest level since June last year. However, the employment market appeared to be contracting.

Wang Zhe, Chief Economist at the Caixin Think Tank, stated, "Some companies are confident that future demand will improve and have announced expansion plans. However, the measure of expectations for future activity was lower than the historical average."

China's National Bureau of Statistics reported that the non-manufacturing (service) PMI for January rose by 0.7 from the previous month to 51.4, the highest since September last year. The manufacturing PMI was recorded below the baseline at 49.1.

The previously released Caixin Manufacturing PMI for February rose by 0.1 points from the previous month to 50.9. With manufacturing and services PMIs diverging, the composite PMI for February remained unchanged at 52.5 compared to the previous month.

Economist Wang Zhe said, "Both manufacturing and service sectors recorded steady growth in February. The manufacturing PMI showed growth for four consecutive months, and the service sector expanded for 14 consecutive months, indicating an overall economic recovery."

This content was produced with the assistance of AI translation services.