Event:
On January 30, the National Bureau of statistics released the PMI index of January. The manufacturing PMI index recorded 50.1%, down 0.2 percentage points from the previous month.
Comments:
Manufacturing PMI fell seasonally without over interpretation. The prosperity of the upstream raw material processing industry continued to improve. The decline of manufacturing PMI conforms to the seasonal law and does not need to be over interpreted. In January, the manufacturing PMI index recorded 50.1%, down 0.2 percentage points from the previous month and 0.3 percentage points lower than the historical average, mainly due to the seasonal decline of production and new orders. By industry, the PMI of downstream agricultural and sideline food and upstream industries such as black smelting, non-ferrous smelting and petroleum processing that do not stop production during holidays rebounded month on month, while the PMI of other industries mostly fell. Production fell seasonally, and the production boom of holiday consumption and upstream related industries was high. In January, the PMI production index recorded 50.9%, down 0.5 percentage points from the previous month and 0.6 percentage points lower than the historical average. By industry, the production index of food and beverage, sports and entertainment and other industries related to consumption during the Spring Festival holiday was higher than 52%, and the production maintained a rapid growth; At the same time, the PMI index of upstream black smelting, non-ferrous smelting and other industries rebounded month on month, the purchasing intensity of enterprises increased significantly, and the purchasing volume index and raw material inventory index rose to the expansion range.
New orders also fell seasonally, while new export orders rebounded. In January, the PMI new order index recorded 49.3%, down 0.4 percentage points from the previous month, with a decline comparable to the historical average; The PMI new export order index recorded 48.4%, up 0.3 percentage points from the previous month, better than the change in the same period in history. By industry, PMI’s new orders rebounded mainly in downstream holiday consumption and upstream raw material processing industries.
The boom of small enterprises and service industry fell, but the new orders in the construction industry rebounded and the “three-step” of steady growth was carried out. When the boom of different enterprises was divided, the boom of small enterprises further declined. In January, the PMI of large enterprises rebounded by 0.3 percentage points compared with the previous month, while the PMI of medium-sized and small enterprises fell by 0.8 and 0.5 percentage points respectively. Among them, the PMI of small enterprises fell to 46%, setting a new low since March 2020; The production, new orders, new export orders, production and business activity expectations, procurement volume and other indicators of medium-sized and small enterprises fell compared with the previous month.
The boom of the service industry has fallen, but it is better than that in the same period last year. The impact of the repeated epidemic may tend to weaken. In January, the PMI of non manufacturing industry recorded 51.1%, down 1.6 percentage points from the previous year, lower than 3.3% in the same period in 2021; Among them, the PMI of the service industry fell by 1.7 percentage points, mainly due to the decline in the boom of transportation and accommodation related to offline activities. High frequency data show that the impact of repeated outbreaks on offline activities may be weaker than in the past. As of January 29, the number of Spring Festival passengers was nearly 330 million, which was less than that in normal years, an increase of nearly 50% compared with 2021. New orders and activities in the construction industry are expected to pick up, or point to steady growth, which will boost or lag the economy.
In January, the PMI of the construction industry recorded 55.4%, down 0.9 percentage points from the previous year and 1.2 percentage points lower than the historical average; Among them, the expected index of new orders and business activities in the construction industry rebounded by 3.3 and 4.5 percentage points respectively compared with the previous month, or related to the increase of infrastructure and other projects under the overweight of steady growth. At the beginning of the year, the economic output and demand were relatively low, or the transmission lag of steady growth was prolonged due to the repeated epidemic and the early return of personnel.
Reiterate the view: when the “three-step” of steady growth is carried out, the “economic bottom” may appear around the first quarter. The first step is to increase monetary easing, reduce reserve requirements and interest rates, issue local bonds in advance and speed up the issuance, so as to drive the increase of government financing and provide financial support for steady growth; The second step is to accelerate the construction of infrastructure, industrial and other projects represented by major projects to drive the improvement of physical demand. It is expected that the marginal improvement will be the most obvious in the second quarter; The third step is to get out of the “negative cycle” of contraction in real demand, repair economic expectations, and return GDP growth to a reasonable range of 5-5.5%.
Risk tip: the policy effect is less than expected, and the epidemic situation is repeated.
