Original title: Service PMI rebounded sharply, strong expansion trend appeared
The July Caixin China General Service Industry Operating Activity Index (Service Industry PMI) announced on August 4 recorded 54.9, which not only far exceeded expectations at 50.5, but also increased sharply by 4.6 percentage points from June, showing a strong expansion of the service industry. The strong growth of service industry PMI offset the drag of the slowdown of manufacturing PMI. In July, Caixin China’s comprehensive PMI recorded 53.1, an increase of 2.5 percentage points from June, indicating that the expansion of China’s overall economic activity has accelerated.
The PMI trend of the Caixin service industry is in line with the official trend. The data released by the National Bureau of Statistics a few days ago also showed that the prosperity of the service industry has increased. Driven by summer consumption and other factors, the business activity index of the service industry rose by 0.2 percentage points from the previous month to 52.5%, showing the recovery of the service industry.
From the perspective of industry conditions, among the 21 industries surveyed, 18 industries have business activity indexes in the expansion range, an increase of 6 from the previous month, and the service industry’s prosperity has expanded. Among them, the business activity index of industries such as air transportation, accommodation, catering, ecological protection and environmental governance all increased by more than 10.0 percentage points from the previous month. The release of industry market demand accelerated, and the total business volume increased rapidly; currency, finance, insurance and other industries fell by more than 9.0 Percentage points, the expansion of industry operations has slowed down.
The Caixin service industry PMI sub-index shows that in July, service industry supply and demand continued to expand for 15 consecutive months. Both the service industry production index and the number of new orders in July increased significantly compared with June. The surveyed companies said that in July, the market conditions became stronger, the number of customers and demand were boosted, and the output also increased at the same time. However, dragged down by the contraction of new orders in the manufacturing industry in July, the total number of new orders in the two major industries continued to grow, but the growth rate was low.
In July, the service industry employment index also returned to above the line of prosperity and decline. According to reports, companies have gradually increased their labor force to meet the expanding market demand, but some companies have also affected the scale of recruitment in order to control costs. Due to the increase in new orders and the lack of corporate manpower, the backlog of work in July increased slightly. The input price index and sales price index of the service industry rose again in July. The interviewed companies generally stated that labor costs, fuel costs and raw material prices have all increased recently. The pressure of rising input costs was transmitted to the sales side, and the sales price index also climbed in July.
Wang Zhe, senior economist at Caixin Think Tank, pointed out that the manufacturing and service industries continued to expand in July, the supply and demand were generally improving, and the job market was stable. However, the cost and sales price indices of the manufacturing and service industries are in the expansion range.
It is worth mentioning that the service industry market sentiment remains optimistic, and the Caixin Service Industry Business Expectation Index rebounded slightly from June. The industry generally expects that demand will be further released after the epidemic is over. In addition, factors such as new product launches and capacity increases have also boosted market expectations.
Zhao Qinghe, a senior statistician at the Service Industry Survey Center of the National Bureau of Statistics, also said recently that from market expectations, the business activity expectation index is 60.1%, which is within the high range of 60.0% for six consecutive months. Service companies continue to be optimistic about the prospects for recent business development. Among them, railway transportation, air transportation, postal express, telecommunications, broadcasting and television and satellite transmission services, Internet software and information technology services and other industry business activity index are above 64.0%, which are higher than the overall service industry, and related industries are expected to continue to maintain a relatively fast Growth trend.
However, Du Xishuang, Director of the Service Industry Department of the National Bureau of Statistics, also pointed out previously that, overall, my country’s service industry economy continues to recover stably, but there are still many uncertain and unstable factors at home and abroad, and the foundation for the recovery of the service industry needs to be consolidated. In the next stage, it is necessary to accelerate the stimulation of the potential of domestic demand, smooth the economic cycle, consolidate the overall stable recovery of the service industry, and promote the steady and sound development of the national economy.
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