Caixin China Services Purchasing Managers Index (PMI)

Caixin Service Purchasing Managers Index (PMI) provides an overview of China's service sector state. The index is calculated based on a survey of purchasing managers from more than 400 service sector companies. Companies are selected based on their contribution to China's GDP, in accordance with the standard industry classification.

The indicator refers to the family of purchasing managers indexes calculated by the international Markit agency. This agency cooperates with Chinese media group Caixin.

The survey participants are polled to assess changes in their company: whether various indicators have improved, worsened or remained unchanged in the past month. The questionnaire for the service sector contains questions about business activity, new orders, prices paid and received, employment and business outlook. Diffuse indexes are compiled based on the survey, and the final service sector PMI is calculated using these diffuse indexes.

Separate diffuse subindexes may serve as leading indicators: purchasing managers earlier than others feel changes connected with deliveries, orders and other important economic parameters. Thus, their estimates of the market states come earlier than other statistic values, which are usually calculated after the situation has changed.

Readings above 50 point to a general growth of service sector activity, and readings below 50 indicate a decline. The growth of service PMI suggests further development of Chinese service industry. This may affect yuan quotes positively.