The services PMI has come in at 54.4
- from expected 52.3 and prior 51.1
Composite also better, in at 52.9
- from 50.7 previously
These are both significant gains from February results and continue the better run of data from China.
Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said:
"The Caixin China General Services Business Activity Index jumped to 54.4 in March from 51.1 in the previous month.
Among the gauges included in the survey:
- 1) The gauge for new business surged to the highest since January 2018, pointing to improved demand for services;
- 2) The measure for employment continued to edge down although it remained in the expansionary territory, indicating the sector's demand for workers continued to weaken;
- 3) Inflation remained subdued, as the gauges for prices charged by service providers and the prices for input costs both edged down;
- 4) The measure for business expectations rebounded slightly from the previous month, but still signalled relatively weak confidence.
The Caixin China Composite Output Index rose to 52.9 in March from 50.7 in February, the highest since June 2018.
- 1) The gauge for new exports rebounded back into expansionary territory, and the indicator for overall new orders also jumped, suggesting that domestic demand continued to recover.
- 2) The employment gauge also bounced back into expansionary territory, indicating easing pressure on the labor market. The gauges for input costs and output charges both rose marginally, meaning prices are likely to remain stable.
- 3) Business confidence was yet to fully recover as the measure for future output only increased slightly.
In general, China's economic fundamentals recovered in March, with domestic and external demand as well as manufacturing employment improving. However, business sentiment has remained cautious, and inflation was subdued.
The three-month moving average of the Caixin China General Manufacturing PMI remained in contraction territory, while the Caixin China Composite Output Index showed tentative signs of recovery following a relatively subdued start to 2019. More evidence is needed to determine whether the Chinese economy has stabilized."
Positive news for China proxy trades 9and risk more generally continues out of China. AUD has gained a few more tics, stock markets taking a rosy view also.
