Event: manufacturing pmi50 in January 1. The expected value is 50.1, and the previous value is 50.3; January non manufacturing pmi51 1. The former value is 52.7. In January, the business condition index (BCI) of Chinese enterprises was 52.6, the previous value was 53.0.
Manufacturing industry: the expansion of manufacturing industry has weakened. Affected by the off-season in winter, the speed of production expansion slowed down; Demand continues to decline, and domestic demand is weaker than external demand; The margin of export orders has improved, the base is not high, and it is expected that short-term exports will still be resilient; The Russian Ukrainian crisis pushed up the prices of oil, aluminum and other commodities, and PPI is expected to rise month on month and fall year on year; The overall inventory of enterprises fell, but the upstream black, nonferrous and other industries were boosted by the positive stock preparation before the festival, and the inventory increased.
In January, the manufacturing PMI was 50.1%, down 0.2 percentage points from the previous value, above the boom and bust line for three consecutive months. Specifically:
1) the expansion of manufacturing industry is weakened, and the speed of production expansion slows down due to the influence of off-season; Demand continues to decline, and domestic demand is weaker than external demand. On the supply side, PMI production in January was 50.9%, higher than the boom and bust line for three consecutive months, but 0.5 percentage points lower than the previous value, and the speed of production expansion slowed down. On the one hand, the dual control of energy consumption has been relaxed since the fourth quarter of 2021. The policy of "ensuring supply and stabilizing price" of the national development and Reform Commission supports the continuous repair of industrial production, and PMI production has been above the boom and bust line for three consecutive months. On the other hand, the weather turned cold, and some industries entered the traditional off-season. PMI production fell in January, and the speed of production expansion continued to slow down. High frequency data showed that in January, the daily average inventory of coal and the operating rate of all steel tires in Qinhuangdao Port decreased compared with the previous month. At the industry level, according to the National Bureau of statistics, the production of industries related to the Spring Festival holiday increased rapidly, such as food, wine and beverage, refined tea, paper printing, culture, education, sports, beauty and entertainment products. On the demand side, in January, PMI new orders and new export orders fell by 0.4% and rebounded by 0.3 percentage points to 49.3% and 48.4% respectively compared with the previous month. The demand is still weak. Among them, PMI new orders are lower than the boom and bust line for six consecutive months and PMI new export orders are lower than the boom and bust line for nine consecutive months. According to the Bureau of statistics, the new order index of textile, chemical fiber, rubber and plastic products, special equipment and other industries is lower than 46%, and the demand continues to be weak; The new orders of food, wine, beverage, refined tea, medicine and other industries are pointed out to be in the expansion range, and the demand is rising. In addition, PMI imports fell 1 percentage point to 47.2%, lower than the boom and bust line for eight consecutive months. From this perspective, the overall demand fell in January, PMI new orders and PMI imports fell, while PMI new export orders rebounded, reflecting that domestic demand was weaker than external demand.
2) the margin of export orders is improved, the superimposed freight rate is still high, the base in January is not high, and the short-term export is expected to be resilient; However, given that export orders have been in the contraction range for nine consecutive months and the support of price factors will gradually weaken, exports are expected to decline tenaciously in 2022. In January, PMI's new export orders rebounded by 0.3 percentage points to 48.4%, and the demand was improved compared with the previous month, but the overall situation was still weak, in the contraction range for nine consecutive months. In the previous report, we pointed out that the year-on-year deviation between PMI's new export orders and export amount is related to PMI's leadership, rising freight rates and other factors. In view of the marginal improvement of PMI's new export orders since January 2021, China's export container freight index (CCFI) increased by 7.5% month on month in January, and the export amount base in January is not high (24.6% year-on-year in January 2021 and 10% compound growth rate in two years). It is expected that exports in January 2022 will still be resilient. Maintain our report "export in the post epidemic era, what are you concerned about?" According to the view in, looking forward to 2022, considering the decline of overseas demand, the decline of loose policy, the recovery of supply, the possible decline of prices and other factors, the export growth rate is expected to decline, but the repeated epidemic may form a certain support for exports. We suggest to pay attention to the impact of the following variables on exports: drag items: falling external demand; Support items: repeated epidemic, stable supply chain, stable foreign trade policy and RMB devaluation.
3) the Russian Ukrainian crisis has pushed up oil prices and aluminum prices, increased demand for iron ore and prices, and the ex factory price of PMI and the purchase price index of raw materials have increased significantly month on month. We calculate that PPI may be slightly positive month on month, declining year-on-year, but still remain high; The overall inventory of enterprises fell, but the upstream black, nonferrous and other industries were boosted by the positive stock preparation before the festival, and the inventory increased. In terms of price, in January, the purchase price and ex factory price of PMI raw materials rose sharply by 8.3 and 5.4 percentage points respectively to 56.4% and 50.9%, returning to the expansion range. Combined with high-frequency data, the price index of means of production fell by 0.2% month on month as of January 21, and the Nanhua industrial products index and CRB industrial raw materials spot index rose by 7.5% and 0.8% month on month as of January 28. It is expected that the PPI may be slightly positive month on month in January, falling to about 9.4% year-on-year. In addition, the PMI ex factory price minus the purchase price of PMI raw materials was - 5.5% (the previous value was - 2.6%), the negative gap turned up, and the cost pressure increased. In terms of industry, according to the Bureau of statistics, the price index of petroleum, coal, non-ferrous metals and other industries increased significantly; In January, geopolitical risks such as the escalation of the conflict between Russia and Ukraine pushed up oil prices, aluminum prices, and the replenishment of steel mills before the festival pushed up the demand for iron ore, and the price of iron ore rose sharply month on month. In terms of inventory, the inventory of PMI raw materials and finished products fell by 0.1 and 0.5 percentage points to 49.1% and 48.0% respectively in January, which may be related to the rise of procurement costs and the slowdown of production expansion in January. In terms of industry, according to the Bureau of statistics, the upstream black, nonferrous and other industries actively prepared goods before the festival, strengthened procurement, and the inventory increased compared with the previous month.
Non manufacturing industry: the expansion rate of non manufacturing industry has slowed down. Dragged down by the repeated epidemic and the decline of real estate, the prosperity of service industry has fallen, the performance of industry has been divided, the prosperity of monetary finance and retail industry has rebounded, and the prosperity of transportation, postal service, accommodation and residential service industry has fallen; Real estate sales deteriorated year-on-year and month on month. Affected by the traditional off-season, the prosperity of the construction industry has dropped; However, it is expected that the index and new order index will rebound. Driven by funds and projects, it is expected that the construction operation will improve after the festival, and the growth rate of Q1 infrastructure may also increase.
In January, the non manufacturing PMI business activity index fell 1.6 percentage points month on month to 51.1%, which was in the expansion range for five consecutive months, but it was the lowest in nearly five months in January. Among them, the PMI of the service industry fell by 1.7 percentage points to 50.3%, which is related to the recurrence of the epidemic in China and the decline of the real estate boom. According to the Bureau of statistics, supported by loose policies such as reducing reserve requirements and interest rates, the business activity index of monetary and financial services industry is in the high boom range of more than 60%; Driven by the "double festival" holiday consumption, the retail industry rebounded; Affected by the repeated epidemic, the landscape of transportation and postal services, accommodation and residents' service industry has dropped. High frequency data show that on January 30, the city's real estate sales deteriorated month on month and year-on-year, and the year-on-year decline of the total monthly area and the average daily area expanded. The recovery of the real estate boom still needs to wait. The PMI of the construction industry fell by 0.9 percentage points to 55.4%, which is related to the seasonal off-season of the construction industry, that is, the rain and snow weather and the return of workers in the Spring Festival affect the construction; However, the construction industry is expected to rebound, that is, the expected index of business activities rebounded by 4.5 percentage points to 64.4%, and the new order index of the construction industry rebounded by 3.3 percentage points to 53.3%.
Maintaining the previous view, the central economic work conference and the local two sessions in 2022 both pointed to the need to expand effective investment and moderately advance the layout of major infrastructure. In addition to traditional infrastructure such as "railway public infrastructure", the importance of 5g base station construction, UHV, new energy vehicle charging pile, artificial intelligence, industrial Internet and other new infrastructure has increased, as well as energy, water conservancy, pipeline, municipal For other projects such as ecological environment, disaster prevention and mitigation, we sorted out major projects in various provinces and cities in 2022, with a total investment of more than 4 trillion yuan. Driven by the two-way promotion of funds and projects, it is expected that the growth rate of Q1 infrastructure investment in 2022 may rise significantly to 8% - 10%.
Small and medium-sized enterprises and Employment: the prosperity of large enterprises has improved, the prosperity of small and medium-sized enterprises has deteriorated, the supply and demand of small enterprises are weak, and the demand is even worse; The decline of employment boom is related to the downward demand of manufacturing and non manufacturing industries, the return of workers during the Spring Festival and other factors.
1) according to the types of enterprises, the prosperity of large enterprises has improved, and the prosperity of small and medium-sized enterprises has deteriorated. The PMI of small enterprises has been in the contraction range for 9 consecutive months. The supply and demand are weak, and the demand is weaker, which is more consistent with the situation of private small and medium-sized enterprises shown by BCI index. In January, the PMI of large, medium-sized and small enterprises changed by 0.3, - 0.8 and - 0.5 percentage points to 51.6%, 50.5% and 46.0% respectively, indicating that the prosperity of large enterprises continued to improve, the prosperity of small and medium-sized enterprises deteriorated, and the PMI of small enterprises remained in the contraction range for 9 consecutive months, and the prosperity continued to be weak; From the perspective of sub indicators, PMI small enterprise production and new order index are lower than the previous value, showing a weak situation of supply and demand, of which demand has fallen more. This conclusion is consistent with the performance of China enterprise business condition index (BCI). In January, the BCI index fell 0.46 percentage points to 52.6% compared with the previous value, of which the forward-looking index of sales and inventory fell, and the forward-looking index of profit and financing environment rebounded.
2) the employment has deteriorated and the employment boom has fallen, which is related to the downward demand of manufacturing and non manufacturing industries, the return of workers in the Spring Festival and other factors. In January, the employment index of manufacturing industry, service industry and construction industry fell by 0.2, 0.3 and 2.6 percentage points respectively to 48.9%, 46.5% and 49.2% compared with the previous value, and the employment boom fell.
On the whole, the expansion rate of manufacturing and non manufacturing industries slowed down in January, which is related to the off-season in winter, repeated epidemic and real estate drag. The expectation of steady growth is strong, but the reality is still weak, so we need to wait for the policy effect to appear. Maintaining the previous judgment, looking back, under the drag of real estate, it is expected that there will still be pressure on Q1 economy in 2022, but it may be stronger than 2021q4, and it will gradually recover later. The short-term steady growth may be more reflected in the investment side, including infrastructure ("railway public infrastructure", new infrastructure), high-end manufacturing, affordable housing construction, old transformation, etc. The local two sessions also put forward many means to promote consumption, including stabilizing traditional bulk consumption, developing new consumption formats, releasing the potential of counties and townships, building characteristic commercial streets, etc. The policy will remain loose and help stabilize growth.
Risk tips
The downward speed of real estate exceeded expectations, and the implementation of policies was less than expected.
