The Chinese Services PMI is out and continues the improving trend:
Chinese service providers signalled a further increase in business activity during August. Moreover, the rate of growth accelerated to a marked pace that was the quickest since March. Similarly, new business increased at the quickest pace in five months. In contrast, employment levels declined for only the second time in 55 months, albeit marginally. Nonetheless, service providers expressed an increased level of optimism towards future output, with the level of positive sentiment at a five-month high. On the price front, average input costs increased modestly, while output charges were raised for the first time in four months.
After adjusting for seasonal factors, the HSBC China Services Business Activity Index posted 52.8 in August, up from 51.3 in July, and signalled a marked increase in business activity in the Chinese service sector. Furthermore, it was the quickest expansion of activity since March, following a four-month period of relatively stagnant growth.
New business also increased over the month, and at a marked pace. Approximately 11% of panellists reported higher volumes of new work, with a number of respondents attributing this to a combination of stronger client demand and recent promotions.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
