China's May Caixin Services PMI at 55.1... Forecast 56.2 (Summary)

The Composite PMI is 53.8... Contracted from 54.7 Last Month

[Image source=EPA Yonhap News]

[Asia Economy Reporter Kim Suhwan] China's May Services Purchasing Managers' Index (PMI) declined compared to the previous month.

On the 3rd, Chinese financial media Caixin announced that China's May Services PMI recorded 55.1. This figure is lower than the 56.3 recorded in the previous month and also below the market forecast of 56.2 analyzed by Bloomberg.

Additionally, the composite PMI, which includes both manufacturing and services, recorded 53.8 in May, down from 54.7 in the previous month.

This index, which reflects overall business conditions in the service sector, indicates expansion when above 50 and contraction when below 50.

The decline in China's Services PMI is analyzed to be influenced by a decrease in foreign demand amid the ongoing COVID-19 pandemic abroad. Furthermore, the global rise in raw material prices has been pointed out as a factor burdening the service industry.

An economist from Caixin stated, "Demand and supply in the service sector have been expanding for 13 consecutive months," but added, "However, the pace of expansion has somewhat slowed compared to the previous month."

He further explained, "The continuous pressure on prices due to rising raw material costs is the cause."