China’s PMI rebounded to 49.5 in January, still shrinking, and the economic downward pressure is high.
Mainland manufacturing activity continued to shrink. The National Bureau of Statistics announced that China’s manufacturing purchasing managers’ index (PMI) rebounded slightly to 49.5% in January, up 0.1 percentage point from December, slightly surpassing market expectations of 49.3%, but still For the second consecutive month, it is below the 50% ups and downs. The data reflects that the mainland economy has not accelerated its decline, but it still faces downward pressure from the larger economy.
The analysis pointed out that the inventory and purchase volume of finished products in January dropped sharply by 1.1 and 0.7 percentage points respectively to 47.1% and 49.1%. It can be seen that enterprises are actively destocking and weakening the support of the economy, but benefited from the accelerated construction of infrastructure projects in December last year. The construction industry PMI is still high at 60.9%, bringing a certain economic momentum.
As far as the scale of manufacturing enterprises is concerned, the expansion rate of large-scale enterprises has rebounded, and the operation has a stable trend, while the overall contraction of small enterprises continues to intensify. In January, the PMI of large enterprises rose by 1.2 percentage points to 51.3%, which was higher than the dividing line, reflecting that large enterprises are still optimistic about future market development; medium and small enterprises PMI decreased by 1.2 and 1.3 percentage points respectively to 47.2%. And 47.3% are all below the dividing line, and the decline is larger than last December.
New orders fell for 8 months
As for the classification index, the production index is higher than the dividing line, and the new order index, raw material inventory index and employee index are lower than the dividing line. In addition, the production index rose to 50.9%, up 0.1 percentage point month-on-month, indicating that the manufacturing industry continued to expand and the growth rate also accelerated slightly.
The new orders index fell to 49.6%, down 0.1 percentage points month-on-month, falling for eight consecutive months, indicating that orders for manufacturing companies have decreased month by month. The raw material inventory index rebounded to 48.1%, up 1 percentage point month-on-month, indicating that the inventory of major raw materials in the manufacturing industry declined, but the decline narrowed. The employee index fell to 47.8%, down 0.2 percentage points month-on-month, indicating that the manufacturing industry’s employment continues to decrease.
Zhao Qinghe, senior statistician of the National Bureau of Service Industry Survey Center, said that the manufacturing expansion in January was slightly accelerated. The decline in major raw material purchases and ex-factory prices narrowed, ending a three-month decline, but still at a contraction level; Development expectations are more optimistic; and new kinetic energy continues to accumulate, and the effects of holiday consumption appear. In addition, the data also reflects the recent pressure on companies to face the cost of raw material procurement, and the impact of fluctuations in the RMB exchange rate has also eased.
GDP growth rate may drop to 6.2%
Huatai Research Institute believes that this year’s PMI is still in a downturn. It is expected that the short-term PMI will remain low. It is believed that the downward pressure on the economy is still large. This year’s GDP growth rate will fall back to 6.2%. The future policy will focus more on counter-cyclical adjustment to stabilize overall demand. It is possible to add a cycle adjustment measure.
On the other hand, China’s non-manufacturing business activity index rose to 54.7% in January, up 0.9 percentage points month-on-month, surpassing expectations, indicating that the overall pace of non-manufacturing expansion has accelerated.
Zhao Qinghe mentioned that the pace of expansion of non-manufacturing activities has accelerated and the start is good. The service industry has rebounded markedly, and the economic situation has risen to a high level in seven months. Driven by factors such as holiday effects and consumption upgrades, industries such as wholesale, rail transport and air transport are more active, but the securities and real estate industries continue to shrink.