Goldman Sachs: China Non-Official Services PMI Decelerated in March
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Goldman Sachs reported that the S&P Global China Services PMI (formerly the Caixin Services PMI) decelerated to 52.1 in March from 56.7 in February, indicating a continued but slower expansion in services activity. This reading fell below Goldman Sachs’ forecast of 53.0 and the Bloomberg consensus estimate of 53.6.
The new business index dropped to 50.6 from 53.8, hovering near the breakeven line, while the employment index edged down to 48.6, remaining in contraction territory. Additionally, new export orders fell into contraction, declining from 52.7 to 49.1. Meanwhile, outstanding business showed marginal improvement, inching up to 50.4.
Price indicators revealed persistent pressure on profit margins. The input price index ticked down slightly to 50.7, suggesting a modest easing in cost inflation, driven by rising fuel, raw material, and labor expenses. However, the output price index slipped from 51.0 into contraction at 49.5. This divergence implies that companies are cutting prices to support sales volumes as input costs remain elevated.
Overall, the data suggests that while the services sector continues to expand, the momentum is waning. Slower cost growth has allowed businesses to offer discounts, but this strategy continues to squeeze profitability across the industry.