China's Caixin services PMI drops to 52.8 in July, a big miss

China's Caixin services PMI for July came in at 52.8 vs 53.7 expected and 53.9 last, which showed that Chinese business activity slowed down at a faster pace than expected.

Meanwhile, the Composite Output Index also fell to 52.3 in July from June’s reading of 53.0, 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 dropped to 52.8 in July from June. The sub-index of new business remained in expansionary territory, but fell significantly to its lowest level since December 2015 — a clear sign that demand for services had worsened. This change led to slower increases in employment and prices charged. The sub-index of input costs expanded at a slower pace. The subindex of business expectations, a gauge of companies’ confidence for the next 12 months, remained above 50, but slumped to its lowest level since October 2015, indicating that their confidence had been shaken.”