Commerce Development Research Institute (CDRI) announced today (7th) that "Index of Service Industry, ISI" is representing "tend to warm" yellow-red light and index score of 105 points. The main reason is that the recovery strength in major global markets are strong. Europe and the United States have entered the year-end festival stocking and demand for commodities so that our export momentum remained strong in October at a value of US $ 275.38 billion. Under the export momentum, the turnover performance of our wholesale industry entered third high within this year. In October, due to the Mid-Autumn Festival and the Double Tenth Holiday, the turnover of retail and catering industry increased by 3.21% and 2.90%. The overall performance of the services industry in October remained a "tend to warm" yellow red light.
In November, the demand of pulling goods from the global market is in place, slightly influencing our export strength and further affecting our growth performance in wholesale. In the domestic market, online shopping is stimulated by online shopping festivity. In addition, under the effect of department store anniversary celebrations, the domestic retail and restaurant performance were positive. The index of service industry in November is expected to be fine-tuned to 104 points.
Christmas in December and year-end activities for new year, both will be able to lift domestic retail and restaurant consumption kinetic energy. In the global market, the observation point is that China is the largest consumer market for Lunar New Year, and the stable economic performance will help the growth performance of the wholesale industry in our country. The overall index of service industry in December is expected to return to 105 points.
Global Situation in October
From the perspective of consumption ability to view the entire domestic market demand in the United States, according to the Consumer Confidence Index of University of Michigan, it reached over 100 up to 100.7 in October, an increase of 13.5% over the same period last year. In October, sales of retail sales and catering services (excluding car sales) reached US $ 3,782.1 billion, an increase of 4.4% over the same period of last year, indicating that the consumption power in the United States is still strong. From the industry's performance, manufacturing and non-manufacturing purchasing managers index were 58.7 and 60.1, indicating that the US industry is not only continued to expand and fast. From the perspective of the employment market, the number of non-farm payrolls (private sector) in October increased by 195.1 thousand from the same period of last year to 12,464.9 thousand and the unemployment rate decreased by 0.8% from the same period of last year to 3.9%. The inflation rate in October is 2.1%, further proved that the U.S. domestic market is rapidly expanding. Judging that the U.S. economic situation should have turned into a heat, the U.S. import demand is expected to increase substantially in the first half of next year.
Consumption in eurozone also continued to improve, with consumer confidence index was -1.1 in October, up 7.0% from the same period of last year. Looking at the retail purchasing managers' index released by Markit, the retail sector remained in expansion in October (index was 51.1). At the same time, the inflation rate was 1.4%, further confirming the consumption in eurozone is continuing to improve. The performance of the industry was also quite good. The manufacturing and service sectors continued to expand with purchasing managers' index of 58.5 and 55.0. The unemployment rate in October was 8.8%, the lowest level since 2009, and the demand for labor continued to increase. In October, the ESI score of 114.1 hit a new record high this year and the economy is expected to show a clear recovery in the first half of next year.
Japan's exports and imports in October were JPY 66.9 trillion and 64.1 trillion, up 14.0% and 19.3% respectively year-on-year, and boosting the domestic production. The manufacturing and services purchasing index were 52.8 and 53.4, while the unemployment rate came to 2.7%, indicating that the industry continued to expand. However, consumption declined due to the typhoon, retail sales were JPY 11.5 trillion, down 0.2% from the same period of last year. However, the sales for wholesale still maintained growth to JPY 37.8 trillion, up 4.9% year-on-year. This shows that the consumer performance of retailing industry is still bullish in the domestic market. Overall, with the growth of exports, Japan's economy will continue to recover but its growth strength will be slow. However, with the expansion of Europe and the United States, it is expected that the economic growth rate in the first half of next year will increase substantially.
In October, the annual growth rates of exports and imports in China were 6.9% and 17.2%, respectively, while the annual growth rate of imports remained at double digits. In industrial performance, the purchasing managers' index for manufacturing and service industries were 51.8 and 54.8, and production activity continues to expand. In terms of consumption performance, the total retail sales of consumer goods in China amounted to RMB 34,240.9 billion, representing an increase of 10.3% as compared with same period of last year. The inflation rate was 1.86%, indicating a growth demand in the domestic market.
Domestic Situation in October
Our export value in October was USD 275.4 billion, a decrease of 3.0% over the same period of last year with an import volume of USD 223.4 billion, up 0.1% over the same month of last year. This month's decline in exports was less correlated with domestic production performance and was affected by the typhoon last year, resulting in a high base period in October. The PMIs for manufacturing and services were 57.2 and 53.4, respectively, indicating that domestic industrial activity is quite active and boosting the performance of our job market. The unemployment rate in October came to 3.75%, down 0.2% over the same period of last year. The number of non-agricultural employment was 1,082.5 thousand an increase of 1,073.5 thousand over the same period of previous year. In terms of consumer performance, the turnover of the retail trade was USD 3,681.3 billion, up 3.21% over the same period of last year. The turnover of the catering industry was USD 383.6 billion, an increase of 2.90% over the same period of last year. Overall, the performance of our service industry is fair. In October, the ISI indicator score was 105 points.
Indicator Score:
ISI indicator source is divided into three major directions, the securities market, salaries and operating condition. Following analysis as follows:
l Securities Market: The transaction value of the underlying shares of the commercial service industry slipped to USD 368.8 billion from USD 618.6 billion in October, the indicator scores was down to 99.
l Salaries: The number of employment increased from 483.6 to 484.7 thousand in October, the indicator scores increased to 107 points.
l Operating Conditions: The tonnage of road freight, tonnage of air cargo, and number of aircraft take off and land all increased significantly in October, the index score was revised up to 104 points.
