Caixin services PMI surges to 57.1 in May, indicating continuous expansion of aggregate supply and demand
Published: Jun 05, 2023 01:26 PM
Tourists visit the Datang Everbright City scenic area in Xi'an, northwest China's Shaanxi Province, May 8, 2023. Xi'an, a city with over 3,100 years of history, served as the capital for 13 dynasties in Chinese history. It is also home to the world-renowned Terracotta warriors created in the Qin Dynasty (221-207 BC).(Photo: Xinhua)

Tourists visit the Datang Everbright City scenic area in Xi'an, northwest China's Shaanxi Province, May 8, 2023.(Photo: Xinhua)

China's Caixin services purchasing managers' index (PMI), a private gauge of the country's services sector, rose to 57.1 in May, up 0.7 points from the previous month, indicating continuous expansion of supply and demand in the important sector.

The result for May was the second-highest since December 2020, with the reading remaining in expansion territory for a fifth consecutive month. The 50-point mark separates expansion from contraction.

The indexes for business activity and new orders continued to show expansion in May, rebounding moderately from April, the private survey showed on Monday.
According to surveyed enterprises, pent-up demand was released after China's adjustment of COVID-19 prevention measures, and business conditions have gradually returned to normal, supporting the recent expansion of business activity.
The index for new export orders decreased within the expansion range to the year's low, indicating that overseas demand remains resilient but is growing more slowly.

Benefiting from the recovery in the services sector's aggregate supply and demand, industry confidence remained strong, the survey showed. 

The business expectations index for May, which measures companies' outlook for business activity, declined for the fourth consecutive month to its lowest level this year, but it was still higher than the average level in 2022. Enterprises reported that factors such as the strong post-pandemic recovery, increased customer demand and expansion plans continued to support expectations for further growth.

China has seen a sustained recovery of consumer spending. In the first quarter, the contribution of  consumption to GDP growth rebounded to pre-pandemic levels, Yang Delong, chief economist at Shenzhen-based First Seafront Fund Management Co, told the Global Times on Monday.
Among key sectors, catering, entertainment and tourism grew faster, Yang said, noting that the consumption recovery is making an increasing contribution to GDP growth.

The services sector's rosy recovery has become a highlight of the nation's economy, Yang noted.
The Caixin manufacturing PMI, a key gauge of China's small and medium-sized factories, also picked up momentum in May, rebounding back into expansion territory at 50.9 from 49.5 in April, according to data Caixin released on Thursday.
Global Times