China January Caixin Services PMI 51.0 (vs. 52.2 in December)

China January Caixin Services PMI drops to 51.0

• vs. 52.2 in December
• 25th consecutive month in expansion

Composite: 51.1

• prior 51.4

more to come

From the report commentary, in brief:

• Supply & Demand:

  • Growth in business activity and new orders continued but at the slowest pace in four months.
  • External demand rebounded after a brief decline in December, with new export orders expanding in 16 of the past 17 months.

• Employment Trends:

  • Employment declined for the second straight month.
  • Firms focused on reducing headcount for greater efficiency, bringing employment to its lowest level since April 2024.
  • Backlogs of work fell for the first time since July 2024, due to weaker demand and improved efficiency.

• Price Pressures:

  • Input costs and output prices rose modestly, driven by higher wages and raw material costs.
  • Firms passed some of these costs to customers through slight increases in selling prices.

• Business Sentiment:

  • Market optimism improved, with the business expectations index rising over 2 points from December.
  • Despite gains, sentiment remains below the historical average, with firms concerned about intense competition and global trade uncertainties.

This article was written by Eamonn Sheridan at www.forexlive.com.