January and February are the off-season of industrial production. The operating rate of electric furnace is at a low level, the price of coal decreases, and the industrial added value is expected to increase by 3.5%. As the manufacturing production is in the off-season, it is expected that the manufacturing PMI may decline seasonally to 49.8%. Affected by the spread of the epidemic, PMI in non manufacturing industries may also fall.
Since the beginning of the year, the probability of infrastructure investment has accelerated. The "good start" of credit in January has supported manufacturing investment, but real estate investment will remain low. From the perspective of steel prices rising first and then falling, and cement prices falling continuously. The current investment growth rate is still low, which is expected to be about 4%.
Despite the improvement in automobile sales, the retail index of goods generally declined, and the impact of the epidemic on offline consumption was obvious. Consumption is expected to increase by 3%, with a low growth rate.
Overseas demand is generally strong, while Japan is weak. The export growth of South Korea slowed down slightly in February. It is expected that the total export growth of China in January and February will fall back to 15.3%, but still maintain a certain prosperity. Mainly due to the rise of energy prices, the year-on-year growth rate of imports is expected to be 15.8, still maintaining a certain growth rate.
As Shenzhen Agricultural Products Group Co.Ltd(000061) and pork prices continue to decline, the year-on-year increase of CPI is expected to narrow to 0.6%. PPI continued to decline, but under the conflict between Russia and Ukraine, the sharp rise in international commodity prices is likely to increase the month on month increase of PPI and delay the downward trend of PPI. It is expected that the year-on-year increase of PPI in February will drop slightly to 8.9%. In the follow-up, we need to pay close attention to the impact of the conflict between Russia and Ukraine on China's inflation.
