Services PMI February surveys are the opposite of the manufacturing surveys. The HSBC Services PMI improved in February while the official Services PMI weakened.
February data signalled renewed growth of business activity across the combined manufacturing and service sector, with the HSBC Composite Output Index up from 49.7 to 51.8. The overall expansion reflected a broad stabilisation of manufacturing production and stronger growth of service sector activity.
The latter was signalled by a rise in the seasonally adjusted Business Activity Index from 52.5 to 53.9 in February. Although the strongest in four months, the pace of growth of services output was again below the long-run series average.
Behind the latest increase in service sector business activity was a stronger expansion of incoming new orders. Despite remaining below the long-run series average, the rate of new business growth reached an eight-month high in February. In contrast, the level of new work placed at manufacturing firms fell for a fourth month in succession.
The latest service sector findings signalled that new business wins did little to alter the trend in outstanding business levels, which remained broadly stable over the month. A similar tendency was seen in manufacturing and, as a result, at the composite level.
February data signalled a solid increase in average costs faced by Chinese service providers, with the pace of inflation reaching a three-month high. This, coupled with a rise in manufacturers’ cost burdens, meant that higher input prices were recorded at the composite level for the first time since October last year.
Despite higher average costs, service sector companies left their output charges broadly unchanged compared to one month earlier. With manufacturers noting a marked easing in the rate of output price discounting, overall average tariffs fell at the slowest rate in the four-month period of reduction.
THE OFFICIAL SERVICES PMI:
China’s non-manufacturing industries contracted for the first time in three months in February, adding to signs the world’s second-biggest economy is weakening.The non-manufacturing purchasing managers’ index fell to 48.4 from 52.9 in January, the National Bureau of Statistics and China Federation of Logistics and Purchasing said in a statement today in Beijing