China's Non-manufacturing PMI Decreased in February
Department of Service Statistics of NBS
China Federation of Logistics and Purchasing (CFLP)
In February, non-manufacturing purchasing manager index was 48.4 percent, 4.5 percentage points decrease over the previous month.
In sub-indices of non-manufacturing PMI, new orders index, new export orders index, in-hand orders index, stock index, input price index declined in different degrees, subscription price index, employed person index, supplier delivery time index, and business activities expectation index has improved.
The new orders index fell. The new orders index was 46.1 percent, decreased 2.4 percentage points over the previous month, fell below the threshold for two consecutive months, which indicated that the demand for non-manufacturing market went down month-on-month. In view of different industries, the service industry conducted by the factor of the early release of consumer demand of the “Spring Festival” holiday, the new orders indices of air transport industry, railway transport industry, road transport industry, retail trade industry, food and beverage industry fell sharply this month, market demand dropped month-on-month, new orders index of real estate industry was 40.5 percent, located below the threshold for 22 consecutive months since May 2010, the real estate market continued in a climate range; new orders index of construction was 49.5 percent, up by 17.4 percentage points over the previous month, continued below the threshold which affected by the impacts on the traditional production of off-season, the construction market demand continued to slow, but the decreasing amplitude has substantially narrowed, the business activities will be gradually restored with the warming climate.
Intermediate input price index dropped slightly. Intermediate input price index was 58.3 percent, down 0.3 percentage points over the previous month, which indicated that non-manufacturing enterprises in production and operation costs rose, the increasing amplitude dropped. In view of different industries, the enterprises operational cost has significantly increased in the water transport industry, road transport industry, rail transport industry, postal services industry, and wholesale trade industry. The survey results showed that the main factors of increasing non-manufacturing intermediate input prices was affected by the increased costs of employment and fuel prices.
The subscription price index promoted above the threshold slightly. Subscription price index was 51.3 percent, increased 0.1 percentage points over the previous month, positioned above the threshold for two consecutive months, which indicated that sales prices of non-manufacturing promoted month-on-month. In view of different industries, the subscription price of wholesale trade industry increased dramatically, that of the telecommunications transmission, and other information services industry, railway transport industry, resident services industry, computer services and software industry dropped significantly. The subscription price index of real estate industry was went up by 4.4 percentage points over the previous month, which continued below the threshold, this indicated that the subscription of real estate enterprise has continued to decline, but the decreasing amplitude has narrowed; that of the construction industry remained stable.
Business activities expectation index continued rising. This index was 66.5 percent in February, increased 3.3 percentage points over the previous month, maintained upward trend in four months, which indicated that non-manufacturing enterprises remained optimistic to the future market. In view of different industries, the business activities expectation index of postal services in the service industry, computer services and software industry, wholesale trade industry, and retail trade industry located in highly place which was more than 70 percent, that of real estate industry after returned above the threshold after three consecutive months which stood at 55.5 percent this month, the future development of the industry confidence has been restored; the construction enterprises are more optimistic about the next six months on business conditions, the business activity expectations index was 74.0 percent, and up 6.9 percentage points over the previous month.
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.