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China January Caixin Services PMI 51.0 (vs. 52.2 in December)

China January Caixin Services PMI drops to 51.0

  • vs. 52.2 in December
  • 25th consecutive month in expansion

Composite: 51.1

  • prior 51.4

more to come

From the report commentary, in brief:

  • Supply & Demand:

    • Growth in business activity and new orders continued but at the slowest pace in four months.
    • External demand rebounded after a brief decline in December, with new export orders expanding in 16 of the past 17 months.
  • Employment Trends:

    • Employment declined for the second straight month.
    • Firms focused on reducing headcount for greater efficiency, bringing employment to its lowest level since April 2024.
    • Backlogs of work fell for the first time since July 2024, due to weaker demand and improved efficiency.
  • Price Pressures:

    • Input costs and output prices rose modestly, driven by higher wages and raw material costs.
    • Firms passed some of these costs to customers through slight increases in selling prices.
  • Business Sentiment:

    • Market optimism improved, with the business expectations index rising over 2 points from December.
    • Despite gains, sentiment remains below the historical average, with firms concerned about intense competition and global trade uncertainties.

This article was written by Eamonn Sheridan at www.forexlive.com.

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