China’s private sector grew at the slowest pace in four months in March due to weaker increases in output across manufacturing and services sectors, data published by IHS Markit showed Wednesday.
The Caixin composite Purchasing Managers’ Index fell to 51.8 in March from 53.3 in February. Nonetheless, the score remained above the neutral 50.0.
The services PMI slid unexpectedly to 52.3 in March from 54.2 in February. The score was forecast to rise to 54.5. The latest reading pointed to a modest increase in services activity that was softer than the long-run trend.
Manufacturers and service providers both noted slower upturns in new order volumes in March. This has led to the slowest expansion in composite new business for six months at the end of the first quarter.
Employment trends deteriorated across both sectors. At composite level, employment decreased for the first time since last October.
Services providers and manufacturers reported slower input price inflation in March. Overall, composite input costs grew at the softest pace since last July.
Chinese companies continued to increase their selling prices in March as part of attempts to pass on higher cost burdens to clients. Although both manufacturers and services companies recorded slightly faster rates of charge inflation compared to February, increases were modest overall.
While the level of positive sentiment strengthened to a one-year high at manufacturers, optimism across the service sector dipped to a six-month low in March. At the composite level, business confidence edged up fractionally to the highest for nine months, survey showed.