The survey uses a methodology identical to the HSBC China Manufacturing
The survey uses a panel of regularly participating companies to monitor trends in busi-ness conditions in the private sector services economy. The panel has been carefully selected to accurately replicate the true structure of the Chinese services economy.Questionnaires are dispatched at mid-month, requesting comparisons of the current situation with that of one month previously.
Purchasing Managers’ Index™
are trade marks of Markit Economics Limited, HSBC use the above marks under licence. Markit and the Markit logo are registered trade marks of Markit Group Limited.
2006 2007 2008 2009 2010 2011 2012
50 = no change on previous month
Increasing rate of contraction Increasing rate of growth
Purchasing Managers’ Index™
• New business volumes increase at slowest pace since August 2011
• Input price ination weakest in current 43-month sequence of ination• Business condence remains historically low
HSBC China Services PMI
Business activity growth remains only modest in May
Embargoed until: 09:45 (BEIJING), 5 June 2013
Business activity in the Chinese service sector increased in May.That said, the rate of expansion was broadly unchanged from Apriland remained well below the long-run series average. Growth of
new business was also historically low, with rms signalling only
a modest rise in new orders. Concurrently, optimism towardsthe 12-month business outlook in the sector remained relativelyweak. On a slightly more positive note, employment rose slightly,reversing a reduction one month previously. After adjusting for seasonal factors, the HSBC China Services
Business Activity Index posted 51.2 in May, up fractionally from51.1 in April, and signalled only a modest increase in activity in
the Chinese service sector. The headline index was the second-
lowest since August 2011 and approximately ve points below
the long-run series average. Panellists nonetheless suggested
that new order growth at some rms drove the overall expansion
of output.Similarly, growth in new business remained subdued in May,with service providers indicating only a modest increase in neworders. The corresponding index was little-changed from April,falling marginally to a 21-month low. Nonetheless, a number of
rms attributed the increase in new business to the launch of
new products.Following a slight reduction in April, employment levels at service
sector rms increased in May, albeit marginally. Anecdotal
evidence suggested that payroll numbers increased in line with
business activity growth at some rms.
Meanwhile, the volume of outstanding business was unchanged
in the latest survey period, following 15 successive months of backlog depletion. The vast majority of respondents (over 92%)
signalled that levels of backlogs of work were unchanged since April. Average input costs faced by service providers continued to
increase over the month. That said, the rate of ination was theweakest in the current 43-month sequence. Higher salary costswere cited by a number of surveyed rms as a key driver of inputprice ination.Conversely, output charges fell for the rst time in four
months during May, albeit only slightly. A number of panellistssuggested that tariffs were cut in response to competitive marketpressures.
Service providers were condent that business activity would
increase over the next 12 months. However, the degree of positive sentiment was relatively unchanged from April’s survey
low. Nearly 25% of respondents anticipate activity to expand over the next year, while just over 3% expect it to contract. Optimism
was largely driven by expectations of improving market conditionsand the launch of new projects, which were expected to boostclient demand and order volumes over the coming months.