China's Manufacturing Purchasing Managers Index Falls for Four Months

In July 2011, China's Manufacturing Purchasing Managers' Index (PMI) was 50.7%, down 0.2 percentage points from the previous month and falling for four consecutive months. This index is the lowest point since March 2009, but it is still at the critical point - the expansion of more than 50%, indicating that China's manufacturing economy as a whole showed a growth trend, but the growth rate continued to slow.

In July 2011, among the five sub-indices that constitute the manufacturing PMI, the new orders index, the employee index, and the supplier's delivery time index increased in different degrees, and the production index and main raw material inventory index fell.
The production index was 52.1%, which was 1.0 percentage point lower than last month and was the lowest level since the 29th month. However, it is still above the critical point, indicating that the production volume of the manufacturing industry has increased slightly, but the growth rate has slowed for four consecutive months. . From the perspective of the industry, the production volume of agricultural and non-staple food processing and food manufacturing, beverage manufacturing, ferrous metal smelting and rolling processing, petroleum processing and coking industries increased year-on-year; transportation equipment manufacturing, textiles, and pharmaceutical manufacturing The production index of other industries continued to be below the critical point, and the production volume of enterprises declined. From the perspective of the size of the company, the production volume of small-scale enterprises fell for the second consecutive month; the production volume of large and medium-sized enterprises continued to grow.

The new order index was 51.1%, which was 0.3 percentage points higher than the previous month. It continued to be above the critical point, indicating that the number of new orders in the manufacturing industry has continued to grow and the market demand has increased slightly. From the industry perspective, new orders for the beverage industry, agricultural and non-staple food processing and food manufacturing, electrical machinery and equipment manufacturing, ferrous metal smelting and rolling processing, communications equipment, computers and other electronic equipment manufacturing industries are growing faster The new orders index for textiles, wood processing, bamboo, rattan and palm grass products and furniture manufacturing, transportation equipment manufacturing, non-ferrous metals smelting and rolling processing industries are below the critical point, and market demand is cooler. The survey showed that the export order index was 50.4%, which was basically the same as last month and continued to be above the critical point.

The main raw materials inventory index was 47.6%, down 0.9% month-on-month, and was below the critical point for three consecutive months, indicating that the inventory of major raw materials continued to decrease. From the perspective of the industry, there is an increase in the inventory of major raw materials in the industries such as the tobacco products industry, special equipment and instrumentation culture, office machinery manufacturing, beverage manufacturing, non-ferrous metal smelting and rolling processing industries; electrical machinery and equipment manufacturing, textile industry Major raw material inventories such as wood processing, bamboo and rattan palm grass products and furniture manufacturing, and non-metallic mineral products industries have been significantly reduced.

The employee index is 50.5%, which is 0.3 percentage points higher than the previous month, indicating that the demand for manufacturing labor has risen, and the increase has slightly increased from the previous month. From the perspective of the industry, the number of employees in industries such as agricultural and non-staple food processing and food manufacturing, communications equipment computers and other electronic equipment manufacturing, ferrous metal smelting and rolling processing industry, special equipment and instrumentation, culture, and office machinery manufacturing industries continued to maintain The growth trend; metal products, beverage manufacturing, wood processing, bamboo, rattan and grass products and furniture manufacturing, textile industry and other industries, employment index is below the critical point, the company's employment fell from the previous month.

The supplier delivery time index was 50.3%, which was a 0.5 percentage point increase from the previous month, which was higher than the critical point, indicating that the delivery time of manufacturing suppliers was faster than that of the previous month.

The major raw material purchase price index was 56.3%, which was 0.4 percentage points lower than last month. It was the lowest level since August 2010, indicating that the increase in the purchase price of manufacturing raw materials continued to narrow, but some industries were still at a high level. In addition to the textile industry, the purchase prices of major raw materials in other industries are all above the critical point, including non-metallic mineral products, agricultural and non-staple food processing and food manufacturing, pharmaceutical manufacturing, wood processing, bamboo, rattan, palm grass products and furniture manufacturing. The purchase price index for industries such as electrical machinery and equipment manufacturing was at a high of over 60%. The purchase price of major raw materials increased significantly, and manufacturing companies still faced relatively severe cost pressures.

The China Manufacturing Purchasing Managers Index (PMI) indicates that the manufacturing purchasing managers surveyed 820 sample companies from the national manufacturing companies and conducted a monthly questionnaire survey of corporate purchasing managers.

The scope of the investigation involves the 28 categories of manufacturing industries in the “National Economic Sector Classification” (GB/T4754-2002). Each sector allocates sample enterprises according to its scale.

The questionnaire involved 11 issues including production volume, new orders, export orders, existing orders, finished product inventory, purchase volume, imports, purchase prices, raw materials inventory, employees, and supplier delivery time. The diffusion index is calculated separately for each question, ie, the percentage of enterprises that are responding positively plus half of the percentage that responds unchanged.

PMI is a composite index that is weighted by five diffusion indices (classification indices). The five sub-indexes and their weights are based on the degree of their prior economic impact. Specifically included: new order index, weight 30%; production index, weight 25%; employee index, weight 20%; supplier delivery time index, weight 15%; raw materials inventory index, right The number is 10%.

PMI is one of the macroeconomic monitoring indicator systems commonly used in the world and plays an important role in the monitoring and forecasting of national economic activities. Generally speaking, 50% is the cut-off point for economic strength. When the PMI is higher than 50%, it reflects the expansion of the manufacturing economy; if less than 50%, it reflects the economic recession of the manufacturing industry.