The Caixin Services Purchasing Managers’ Index (PMI) is an economic indicator that measures the performance of China’s services sector.
The index is based on a survey of purchasing managers from small and medium-sized enterprises (SMEs) across various service industries.
What is Caixin Services PMI?
The Caixin Services PMI is derived from a monthly survey that gathers data from hundreds of purchasing managers across China.
The index is highly valued for its ability to reveal month-to-month changes and trends in the services sector, helping to paint a clearer picture of China’s overall economic health.
The index complements the Caixin Manufacturing PMI, which focuses on the performance of small and medium-sized manufacturing companies in China.
Together, these two indices provide a comprehensive and balanced view of China’s economy, highlighting the importance of both the manufacturing and services sectors.
How to Read the Caixin Services PMI
The services PMI is based on five sub-indices:
- New business
- Business activity
- Employment
- Outstanding business
- Input prices
These sub-indices are weighted to produce the headline PMI figure, which ranges from 0 to 100.
A reading above 50 indicates expansion in the services sector, while a reading below 50 signifies contraction.
When interpreting the Caixin Services PMI report, consider the following factors:
- PMI value: Determine whether the index is above, below, or at the 50-mark threshold. This will help indicate if the services sector is expanding, contracting, or remaining stable.
- Trend direction: Compare the current month’s PMI value with previous months to identify trends in the services sector, such as sustained growth or contraction.
- Sub-indices: Analyze the performance of the five sub-indices to gain insights into specific areas of the services sector, such as new business, employment, and input prices.
- Comparison with other indicators: Examine the Caixin Services PMI alongside other relevant economic indicators, such as GDP growth and the Caixin Manufacturing PMI, to obtain a comprehensive understanding of China’s economic health.
Why is Caixin Services PMI important?
The Caixin Services PMI is of significant importance for several reasons:
- Timeliness: As a monthly indicator, it offers a timely snapshot of China’s services sector, allowing investors, policymakers, and analysts to closely monitor economic trends.
- Representativeness: By focusing on small and medium-sized enterprises, the Caixin PMI complements the official Chinese Non-Manufacturing PMI, which primarily covers large enterprises.
- Global impact: As the world’s second-largest economy, China’s services sector performance can influence global trade, financial markets, and economic growth. The Caixin PMI is a valuable tool for international investors and policymakers to assess the Chinese economy’s health.
Who publishes Caixin Services PMI?
The Caixin Services PMI is compiled by IHS Markit, a leading global provider of information, analytics, and solutions, in collaboration with Caixin Media, a prominent Chinese financial media group.
The data is based on a survey of purchasing managers from small and medium-sized service companies across China.
When is Caixin Services PMI released?
The Caixin Services PMI report is typically released on the third business day of each month, providing data for the previous month.
The report is available through Caixin Media’s website and various financial news outlets.
Additionally, IHS Markit offers subscription-based access to detailed PMI data and analysis, catering to a range of professional users such as investors, economists, and researchers.