The Chinese Services Sector Grew Strongly in February

Overall growth held back by sluggish Manufacturing sector
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Updated: February 19, 2024

Despite many analysts currently holding pessimistic views on economic activity in China, independant research suggests that the Chinese economy is still growing significantly faster than most developed countries. And that growth may be accelerating, particularly in the Service sector.

China Services: Staffing Levels Index Source: World Economics
Note: Data Shown as a Diffusion Index. (50 = 'No Change', above 50 = Increasing growth, below 50 = Declining growth)

All World Economics Services sector growth related Indexes are now positive. Services sector Business Confidence is high. Both the Services Market Growth and Services Sales Growth indices are positive. Crucially, the Service Sector Jobs Index is at a 29 month high. And the overall Sales Managers Services Sector Index reflects widespread growth.

In sharp contrast, the traditionally dominant (in China) Manufacturing Sector is still lagging way behind Services, and parts of industry are still impacted by the after effects of Covid. As the Services Sector now accounts for 55% + of economic activity (up sharply from a decade ago), overall economic activity appears to be rising on the back of the buoyant Services sector.

There is one final piece of good news or bad news, depending on your inclination. Price inflation seems to be a thing of the past, with the Manufacturing Price Index remaining below the 50 "no growth" line. Services registered price inflation a little above the 50 line, and the all sector index was almost precisely at 50, indicating no change in price levels overall.

Optimists can read this as confirmation that the Covid related period of dangerously rapid price inflation is over, with the genie now firmly back in the bottle. Pessimists can start worrying that Japanese style price deflation is now looking far more likely, with all the dangers that portends. The World Economics view is that the real danger now being flagged is for developed country manufacturers, and is that the "China Price", is back, with Chinese manufacturers likely to be able to offer everything from EV's to solar panels at prices way below those of competitors.

In summary, the Chinese economy has some way to go before its growth starts to resemble the heady days of 7%+ annual GDP growth. But there seems little doubt that in February, the large and now dominant Chinese Services sector grew rapidly, and despite the lagging Manufacturing sector, overall economic growth is looking positive.


Sales Managers Index Components: All-Sectors



0 0 0 China|#0A66C2|56.8, 55.9, 55, 54.7, 54.4, 52.8, 52.7, 51.9, 52.1, 51.2, 51.1, 50.7, 51.1, 50.7, 51.3, 51.5, 51.1, 50.7, 50.8, 50.7, 50.7, 51, 51, 50.8, 51.3, 51.4, 50.4, 50.1, 51.1, 52.1, 51.1, 50.3, 50.6, 51.4, 50.5, 51.6, 51.8, 52.4, 51.3, 51.3, 51.1, 50.4, 50.1, 49.7, 50.1, 50.4, 50.3, 50.3, 50.7, 51.5, 51, 50.7, 50.6, 50.3, 50, 50.9, 51.8, 49.9, 50.7, 51.3, 49.4, 51.1, 51.2, 51.6, 51.6, 52.8, 53.3, 52.2, 53.7, 54.1, 52.9, 53.3, 52.4, 53.1, 53, 52.9, 52.8, 54.8, 53.9, 53.7, 54, 52.7, 53.3, 53.5, 53.7, 53.5, 50.6, 51.3, 50.7, 51.2, 50.7, 50.2, 50.2, 51.8, 48.1, 49.3, 51.9, 53, 52.2, 52.1, 50.6, 48.6, 50.7, 50.9, 51.8, 51.8, 52.1, 51.3, 51.9 , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,
Business Confidence

51.9
February 2024
Business Confidence grew at a faster pace in February. The Business Confidence Index measures the level of optimism/pessimism among sales managers for future conditions.
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0 0 0 China|#0A66C2|54.2, 53.8, 53.6, 53.2, 52.1, 51.4, 50.9, 50.9, 52.9, 52.8, 53.1, 51.8, 53, 52.3, 52.3, 52.6, 51.4, 52.1, 50.8, 51.6, 51.4, 51.4, 51.9, 52.1, 52.5, 52.9, 52, 50.9, 53.7, 53.3, 52.5, 51.6, 51.9, 51.5, 51.9, 51.7, 51.7, 52, 51.5, 51.6, 51.2, 50.4, 50.4, 50.5, 50, 49.9, 50.4, 50.4, 50.2, 50.4, 50.4, 50, 50.4, 49.7, 49.4, 48.9, 48.9, 47.2, 47.4, 48, 44.7, 46.6, 44.3, 47.2, 46.5, 46.9, 47.8, 48.5, 49.1, 49.6, 49.5, 50.7, 51.1, 51, 51.9, 51.5, 51.8, 52.5, 52.8, 51.8, 51.3, 50, 50.5, 50.9, 50.4, 49.7, 46, 45.6, 46.6, 47.3, 47.4, 47.4, 46.3, 47.6, 44.4, 46.1, 48, 49.5, 50.4, 49.6, 49.3, 47.2, 47.6, 48.9, 48.7, 49.7, 49.2, 50.5, 49.1 , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,
Market Growth

49.1
February 2024
The Market Growth Index fell to the slowest pace in 4 months in February. The Market Growth Index monitors the underlying growth of the market segments into which the panel members sell.
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0 0 0 China|#0A66C2|55.9, 56.3, 57.7, 56.5, 55.9, 54.7, 54.3, 54.5, 55, 53.6, 54.1, 53.6, 52.6, 53.4, 52.7, 54.3, 53.7, 53.9, 52.7, 52.8, 52.8, 52.6, 53.8, 53.8, 54.1, 54.5, 54.8, 54.8, 56.1, 56.6, 56.1, 54.8, 54.7, 53.5, 55.8, 55.9, 54.7, 55.6, 54.7, 55.1, 54.6, 54.6, 54.7, 53.6, 53.1, 53.8, 53.3, 51.9, 51, 51.7, 52, 52.4, 52.2, 53.4, 52.5, 51.7, 53.9, 51.6, 50.8, 51.3, 44.3, 51, 48.2, 50.2, 50.8, 51.2, 51.1, 51.8, 52.7, 52.9, 55.4, 54.9, 52.3, 54.8, 54.4, 52.7, 53.7, 55.8, 56.2, 55.4, 54.8, 52, 53.2, 51.8, 54.1, 53.5, 50.7, 51.8, 51.7, 50.4, 50.8, 49.7, 51, 50.8, 50, 52.1, 54.6, 54.6, 52.7, 52.7, 50.6, 50.1, 52.2, 53.1, 51.5, 53.7, 53.2, 53.4, 53.1 , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,
Sales Growth

53.1
February 2024
The Sales Growth Index eased slightly in February. The Sales Growth Index defines the speed and direction of overall sales of goods and services (current month from previous month).
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0 0 0 China|#0A66C2|47.9, 48.8, 48.8, 48.6, 48.1, 47.4, 47.4, 47.8, 49.1, 48.5, 48.9, 48.7, 48.9, 49.8, 49.9, 50.9, 50.1, 50.1, 50.2, 50.5, 50.5, 50.2, 51, 50.8, 51.5, 51.4, 51.4, 51.6, 51.5, 52, 52.1, 52, 51.8, 51.3, 51.8, 52.6, 51.7, 53, 51, 50.9, 52.1, 52.9, 53.3, 53, 53.5, 53.8, 53.4, 51.8, 52, 51.7, 51.2, 53.3, 53.3, 51.4, 52, 51.8, 53.9, 51.2, 51, 50.6, 48.2, 51.2, 47.3, 48.7, 48, 49.1, 48.9, 47.8, 49.1, 49.2, 49.2, 49.8, 49.4, 47.9, 48.4, 49.6, 56.6, 53.5, 51.8, 53.7, 55, 56.2, 53.4, 51.3, 51.4, 52.4, 50.5, 53.1, 52, 51, 47.6, 48.2, 48.7, 50.1, 47.6, 50.2, 48.8, 47.9, 49.2, 47.7, 48.5, 47.5, 47.9, 50.9, 50.6, 48.9, 50, 50.2, 50.1 , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,
Prices Charged

50.1
February 2024
Prices increased only marginally in February. The Prices Charged Index measures the speed and direction of changes in the current price of goods and services taking into account any discounts offered.
Find out more about SMI Diffusion Indexes
0 0 0 China|#0A66C2|51.6, 52.8, 52.1, 51.9, 51.1, 51.3, 51.1, 51.5, 51.6, 50.4, 50.5, 50, 50.4, 50.5, 50.9, 51.3, 50.9, 51, 51.2, 50.8, 50.5, 50.2, 50.8, 50.1, 50.7, 51, 50.1, 50.6, 50, 49.9, 50, 50, 50.3, 49.7, 50.2, 50.7, 49.5, 49.9, 49.9, 50.2, 50.1, 50.3, 50.2, 49.7, 49.6, 49.6, 49.5, 49.1, 49.6, 49.5, 49.6, 49.9, 49.4, 49.4, 48.8, 49, 49.8, 49.3, 49.8, 50.1, 47.3, 49.1, 47.1, 46.6, 47.4, 48.3, 49.2, 49.4, 50.7, 51.5, 50.1, 51.1, 51.9, 51.6, 51.3, 50.5, 50.7, 53, 51.9, 51.5, 51.5, 50.6, 50.8, 49.9, 50.9, 49.9, 49.5, 48.4, 49.2, 49.9, 46.8, 47.1, 48.5, 49.1, 47.8, 50, 49.9, 50.3, 50.3, 49.8, 49.7, 48, 49.2, 48.3, 48.6, 50.2, 49.8, 50.1, 50.7 , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,
Staffing Levels

50.7
February 2024
Staffing levels grew at a faster pace in February. The Staffing Levels Index monitors the level of growth or decline in employment against the same period a year earlier.
Find out more about SMI Diffusion Indexes
0 0 0 China|#0A66C2|48.4, 49.3, 49.1, 49.6, 49, 49, 48.5, 48.1, 48.4, 50.8, 50.6, 50.7, 50.4, 51, 49.7, 49.8, 49.6, 50.1, 49.8, 49.4, 49.4, 48.8, 49.7, 50.8, 51.1, 51.7, 51.3, 50.6, 49.6, 50.3, 50.6, 49.5, 48.3, 49.3, 49.2, 49.6, 50.1, 49, 49.4, 49.2, 48.9, 48.3, 48.3, 49.2, 49.6, 49.6, 50, 50.6, 43.8, 47.4, 45.7, 47.7, 48.3, 49.6, 49.7, 50.3, 51.2, 52.1, 52.8, 52.7, 51.1, 51, 51.4, 51.7, 51.4, 53.1, 52, 51.5, 49.3, 48.9, 50.1, 50.8, 51.4, 50.9, 48.4, 48.5, 50, 50.7, 50, 48.3, 48.7, 50.4, 48.9, 50.6, 50.9, 50.1, 49.5, 49.4, 47.8, 47.6, 48, 47.9, 48.2, 49.5, 50, 49.5, 49.2 , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,
Profit Margins

49.2
February 2024
Profit Margins fell in February.
Find out more about SMI Diffusion Indexes




About the Sales Managers Indexes

The Sales Managers' Indexes provide the earliest monthly data on the speed and direction of economic activity in key growth areas of the world.

The SMI’s (Sales Managers’ Indexes) are compiled and analysed by World Economics and are based on survey data collected from a panel of companies stratifying all Industry Classification Board (ICB) sectors which are weighted to reflect their contribution to national Gross Domestic Product.

Key advantages of the SMI's:

  • The SMI's provide the first indication each month of the speed and direction of economic growth.
  • The SMI's provide the most complete indication of growth, covering all private sector activity.
  • The SMI's are based on a key occupational group - sales executives - uniquely able to sense accurate changes in business activity levels.
  • The SMI survey base - salespeople - are used by virtually all businesses, including in frontier markets, unlike other occupational groups.
  • The SMI's focus on the key countries contributing to over 60% of China growth in recent years.






About the Data

SMI data for China is published as diffusion indexes to gauge the speed and direction of economic activity.

Monthly data since 2013 is downloadable for all-sectors, manufacturing and service sectors separatly in a consistent unadjusted format for 7 key indexes: