(Yicai Global) Dec. 5 -- Although Caixin China Services Purchasing Managers’ Index (PMI) hits a new high since August this year and registered the most notable increase in three months, the comprehensive PMI shows China's economic activities increased only slightly, show data released by market research firm IHS Markit.
The latest Caixin China Services PMI for November increased to 52.9 from 51.2 in October, bringing the comprehensive PMI for last month to 51.6 from the 16-month low of 51 in October.
Last month, new business of service industries continued to grow. In terms of business activities, the service sector's new business growth rate hit a three-month high. Many of the companies surveyed said the increase of new customers and promotions led to a rise in overall sales. The new business in manufacturing sector also increased, but the growth rate has slowed compared with the month earlier. Combining the two, the overall growth rate of new orders rose slightly to its highest since August.
With the expansion of operational demands, the employment in service sector also expanded in the middle of the fourth quarter. Despite the employment rose slightly, it has been the most notable growth since August. Manufacturing, on the contrary, continued to shrink and the contraction rate was the most pronounced in three months. For the employment expansion in the service sector offset the continued contraction in manufacturing, and the overall scale of employment remained stable.
Service companies are optimistic about the business prospects for the next one year, while the manufacturers' confidence has declined. Manufacturers' optimism last month dropped to the lowest level in five years since the introduction of the survey in April 2012.
The Caixin China Services PMI for last month was 51.9, up 0.7 points from the month earlier, increasing for the second straight month. The new business index rose significantly, with the input price index and the fee-price index continued to rise. The comprehensive PMI for November recorded 51.6, up 0.6 points from the previous month, mainly driven by recovered service sector. The November Caixin PMI showed that the economy remained stable and there was no significant downside risk.
It is important to note that the continued rise in the price is likely to cause greater inflationary pressures early next year, predicted Zhong Zhengsheng, macroeconomy research supervisor at CEBM, Caixin’s think tank.Keywords: PMI, Caixin, Service