The March 4th Caixin China general service industry activity index (PMI), which was released in February, recorded a 26.5 decline, a sharp decline of 25.3 percentage points. It was almost cut off from the previous month, and for the first time since the November 2005 investigation, it has fallen below the dividing line.
Previously announced in February, Caixin China's manufacturing industry PMI fell 10.8 percentage points to 40.3, dragged down by two industries PMI, February, Caixin China integrated PMI recorded 27.5, a significant decline of 24.4 percentage points, a record low.
This trend is consistent with the Statistics Bureau PMI. In February, the National Bureau of Statistics announced a 30.1 decline in the business activity index for services, a decrease of 23 percentage points, and a combined PMI drop of 24.1 percentage points to 28.9.
The new orders index for services in February fell to a record low for the first time since December 2008. Respondents said that this was related to cancellation of orders and travel restrictions. The new orders index for manufacturing industry has also dropped to the lowest level since record. In the aggregate, the total volume of new orders and new comprehensive export orders also recorded the largest decline in history.
Travel restrictions have led to difficulties in recruitment of service enterprises, while the employment index of service industry has dropped to a minimum, but it has also dropped to the lowest level since the survey started. The manufacturing employment index also dropped to a record low. On the whole, the total number of employment in the two industries has been the biggest since record.
The shortage of manpower and the closure of enterprises have led to a surge in the backlog of service enterprises, and the unfinished business index has soared to the highest level in history. The backlog volume of manufacturing industry has also risen sharply, leading to a sharp rise in the consolidated backlog index to a record high.
The decrease in orders resulted in a drop in demand for input from service enterprises, and the lowest price index for service sector investment. For the first time since November 2009, it fell into a contraction zone. The drop in fees for service industry is less than that of input prices, but it also hit a new low since July 2012. Respondents generally said that the price was cut to attract new orders.
Thanks to the uncertainty brought by the new crown epidemic, the optimism of the service sector has declined markedly to the lowest level since the record, but it is still in the expansion section. Manufacturing optimism rose to a five year high.
Zhong Zhengsheng, chairman and chief economist of the new financial think-tank, said that the impact of the new crown epidemic on China's economy is obvious, and we need to pay attention to the obvious differentiation between entrepreneurs' confidence and manufacturing and service industries. Recently, support policies for manufacturing, small and micro enterprises and industries affected by the epidemic have produced a more obvious effect on manufacturing industry, and the loss of cash flow suffered by the service industry is more difficult to compensate.