China's Non-manufacturing PMI Seasonally Decreased in January

Department of Service Statistics of NBS

China Federation of Logistics and Purchasing (CFLP)

In January, non-manufacturing purchasing manager index was 52.9 percent, 3.1 percentage points decrease over the previous month. In sub-indices of non-manufacturing PMI, new orders index, new export orders index, employed person index, supplier delivery time index has dropped slightly, other sub-indices promoted in varying degrees.

The new orders index fell. The new orders index was 48.5 percent, decreased 2.0 percentage points over the previous month, fell below the threshold, which indicated that the demand for non-manufacturing market went down. In view of different industries, the new orders index of construction was below the threshold, showed a seasonal decline, the real estate market continued in downturn trend because of the macro-control policies, the market demand of retail trade industry, air transport industry, railway transport industry, road transport industry, and other industries remained high demands.

Intermediate input price index rose slightly. Intermediate input price index was 58.6 percent, up 1.2 percentage points over the previous month, which indicated that non-manufacturing enterprises in production and operation costs rose. In view of different industries, the enterprises operational cost has significantly increased in the lodging industry, catering industry, railway transport industry, air transport industry, road transport industry, residents services, and other industries.

The subscription price index returned above the threshold. Subscription price index was 51.2 percent, increased 1.9 percentage points over the previous month, this index returned above the threshold after three consecutive months below 50 percent, which indicated that sales prices of non-manufacturing promoted driven by the holiday consumption this month. In view of different industries, the subscription price of air transport industry, catering industry, lodging industry, rental industry, and business services industry gained significantly increased, while that of real estate industry, telecommunications, transport and other information services industry, building and decorating industry, and other services industries decreased.

Business activities expectation index continued high rising. This index was 63.2 percent in January, increased 1.5 percentage points over the previous month, maintained upward trend in three months, which indicated that non-manufacturing enterprises remained optimistic to the future market.

Annotations:

1. Explanatory Notes

China non-manufacturing purchasing manager index system constituted by 10 sub-indices, they are business activity index, new orders index, new export orders index in hand orders index, stock index, intermediate input price index, subscription price index, employment index, supplier delivery time index, and business activities expectation index. Due to the lack of synthesis of non-manufacturing integrated PMI index, the international society often used business activity index to reflect the overall changes in non-manufacturing economic development, A PMI reading above 50 percent indicates expansion from the previous month, while below indicates contraction.

2. Statistical Coverage

The survey Involves 27 manufacturing industry categories in the “Industrial Classification for National Economic Activities" (GB/T4754-2002).

3. Survey Methods

Manufacturing purchasing managers’ survey was conducted in 1200 sampling enterprises, selected by stratified and PPS sampling method from the non-manufacturing enterprises in the whole country, and was carried out by interviewing the enterprises’ purchasing managers monthly using questionnaire method.

4. Calculation Methods

Non-manufacturing purchasing managers survey involves 10 questions on production, new orders (business required), export, existing orders, finished goods inventory, intermediate input price, subscription price, employees, suppliers delivery time, and business activities expectation. Diffusion index was calculated on each question, i.e. percentage of positive answers in number of enterprises plus half of the percentage in the same answers.