China’s Caixin services PMI in June plunges to 50.3, a 14-month low

China’s Caixin Services Purchasing Managers’ Index (PMI) in June fell to 50.3 which was the lowest level in 14 months.

Caixin Services PMI was released on Monday, which was 4.8 percentage points lower than the reading in May and reached the bottom of previous 14 months’ data.

Caixin’s survey showed that due to the scattered COVID-19 outbreaks in South China’s Guangdong Province since May, the general increase of order volume of service sector was barely seen. However, the new export order volume of services sector expanded in June but only in a limited scale.

Analysts stated that even though the risk of inflation appeared to have been temporarily eased, that due to services sector’s high sensitiveness to pandemic, its recovery may encounter more challenges moving forward.

Chinese enterprises in services sector held positive attitudes toward the development in 2021 but the South China’s pandemic since May chilled their confidence to the lowest point in past nine months, said Caixin’s survey. However, most of them believed that the global pandemic will be under control in future and the industry will recover.

The Caixin Manufacturing PMI, released on July 1, dropped to 51.3 in June, the lowest level since April. The figure was 0.7 points down from May. With the affected of two PMI indexes, the Caixin composite PMI down reached 50.6, also the lowest record in past 14 months.

Caixin PMIs were reflected a similar trend to the official PMI indexes in June released by the National Bureau of Statistics (NBS). PMIs in sectors of manufacturing, services and composite PMI were 50.9, 52.3 and 52.9, which respectively declined by 0.1, 2.0 and 1.3 percentage points than readings in May.

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