China's Caixin services PMI drops sharply to 50.8 in October, 13-month lows

China's Caixin services PMI for October came in at 50.8 vs 52.9 expected and 53.1 last, which showed that Chinese business activity slowed down at a much faster pace than expected.

Meanwhile, the Composite Output Index also fell to 50.5 in October from September’s reading of 52.1, signaling a broad-based slowdown in the overall growth momentum.

Quotes from Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group:

“The Caixin China General Services Business Activity Index slipped significantly to 50.8 in October from the previous month, marking its lowest level since September 2017. The subindex for new business dropped to its lowest point since November 2008, despite staying in expansionary territory, indicating an obviously weakening demand for services. The employment subindex returned to positive territory following a drop in the previous month.”

“The subindex for prices charged by service providers also returned to positive territory, while the one for input costs dropped despite staying in positive territory, suggesting easing pressure on company profit margins. The subindex for business expectations, which gauges services providers’ confidence toward operation prospects over the next 12 months, edged down mildly.”