The Caixin Services Purchasing Managers’ Index (PMI) serves as an economic indicator that assesses the performance of China's services sector. This index is derived from a survey conducted among purchasing managers from small and medium-sized enterprises (SMEs) across various service industries.

The Caixin Services PMI is generated from a monthly survey that collects data from hundreds of purchasing managers throughout China. It is highly regarded for its capacity to highlight month-to-month changes and trends within the services sector, thereby providing a clearer understanding of China's overall economic condition. This index complements the Caixin Manufacturing PMI, which focuses on the performance of small and medium-sized manufacturing firms in China. Together, these two indices offer a comprehensive and balanced perspective on China's economy, emphasizing the significance of both the manufacturing and services sectors.

The services PMI is based on five sub-indices:

• New business
• Business activity
• Employment
• Outstanding business
• Input prices

These sub-indices are weighted to create the headline PMI figure, which ranges from 0 to 100. A reading above 50 indicates expansion in the services sector, while a reading below 50 signifies contraction.

When analyzing the Caixin Services PMI report, consider the following factors:

• PMI value: Assess whether the index is above, below, or at the 50-mark threshold to determine if the services sector is expanding, contracting, or remaining stable.
• Trend direction: Compare the current month’s PMI value with those of previous months to identify trends in the services sector, such as sustained growth or contraction.
• Sub-indices: Evaluate the performance of the five sub-indices to gain insights into specific areas of the services sector, including new business, employment, and input prices.
• Comparison with other indicators: Analyze the Caixin Services PMI alongside other relevant economic indicators, such as GDP growth and the Caixin Manufacturing PMI, to achieve a comprehensive understanding of China’s economic health.

The Caixin Services PMI holds significant importance for several reasons:

• Timeliness: As a monthly indicator, it provides a timely snapshot of China’s services sector, enabling investors, policymakers, and analysts to closely track economic trends.
• Representativeness: By concentrating on small and medium-sized enterprises, the Caixin PMI complements the official Chinese Non-Manufacturing PMI, which mainly covers large enterprises.
• Global impact: As the world’s second-largest economy, the performance of China’s services sector can affect global trade, financial markets, and economic growth. The Caixin PMI is a valuable resource for international investors and policymakers to evaluate the health of the Chinese economy.

The Caixin Services PMI is compiled by IHS Markit, a leading global provider of information, analytics, and solutions, in partnership with Caixin Media, a prominent Chinese financial media group. The data is based on a survey of purchasing managers from small and medium-sized service companies across China.

The Caixin Services PMI report is generally released on the third business day of each month, providing data for the preceding month. The report can be accessed through Caixin Media’s website and various financial news outlets. Additionally, IHS Markit offers subscription-based access to detailed PMI data and analysis, catering to a range of professional users such as investors, economists, and researchers.