Mainland China's service industries experienced a modest expansion in November, fueled by incoming new business, including exports, as reported by S&P Global. The seasonally adjusted Caixin China purchasing managers index (PMI) stood at 51.5 in November, a slight decrease from October's 52.0, yet still above the crucial 50-mark that differentiates growth from contraction.
This trend marks the continuation of service sector expansion that began in January 2023. The consistent growth in November has led to further job creation within the Chinese service industry as companies looked to hire additional personnel to manage increasing workloads. Despite the positive outlook, S&P Global indicated that while there were improvements in underlying demand and market conditions contributing to a rise in new business, the pace of growth decelerated from October and remained below average.
In terms of inflation, the rise in input costs was minimal in November, along with slight reductions in prices charged. November saw a boost in confidence among China's service providers, reaching levels not witnessed since April. However, the optimism was tempered by concerns regarding potential geopolitical tensions and the prospect of additional governmental macroeconomic stimulus.
The China services PMI, compiled from survey responses from 650 private and state-owned services companies between November 12 and November 21, reflects this nuanced landscape. Additionally, the China composite PMI, which combines the manufacturing and services sectors, recorded a score of 52.3 in November, an increase from October's 51.9, thereby extending the ongoing expansion in Chinese business activity to 13 months..