Key investment points:
Event: in February, the PMI of China's manufacturing industry was 50.2%, the former value was 50.1%; PMI of non manufacturing industry was 51.6%, the former value was 51.1%; The comprehensive PMI is 51.2%, and the former value is 51.0%.
In February, the manufacturing PMI expanded steadily, the demand side performed strongly, and the import and export landscape rebounded. The resumption of work and production of enterprises after the festival showed a good trend. The manufacturing PMI index recorded 50.2% in February, up 0.1 percentage point month on month compared with January, and was on the rise and fall line of 50% for four consecutive months. The outlook of the manufacturing industry rebounded steadily. In terms of both supply and demand, the production index of the production side was 50.4% due to the suspension of work during the Spring Festival holiday and the spread of the epidemic. Although it was 0.5 percentage points lower than that in January, it was still in the boom range. On the demand side, the new order index recorded 50.7%, up 1.4 percentage points from January, and returned to the expansion range after six months, accelerating the recovery of manufacturing market demand. In terms of industries, the indexes of supply and demand of pharmaceutical, special equipment, automobile and other industries are higher than 54.0%, with strong performance; However, the indexes at both ends of supply and demand of non-metallic mineral products, ferrous metal smelting and calendering processing industries are lower than 46.0%, and the supply and demand of the industry is weak. In terms of import and export, although affected by the Spring Festival holiday, the new export order index and import index in February were 49% and 48.6% respectively, which were below the boom and bust line, but increased by 0.6 and 1.4 percentage points respectively month on month compared with January. Foreign demand remained resilient and exports maintained a high boom.
The price index remained high and the performance of small enterprises was sluggish. Or due to geopolitical conflicts, international crude oil, energy and other related prices rebounded. In February, the purchase price index and ex factory price index of main raw materials were 60.0% and 54.1% respectively, 3.6% and 3.2% higher than that of the previous month, rising for two consecutive months. From the perspective of major industries, the two price indexes of petroleum, coal and other fuel processing, non-ferrous metal smelting and calendering processing industries continue to be in the high range of more than 60.0%. Under the background of steady growth, the purchase volume index and raw material inventory index recorded 50.9% and 48.1% respectively, up 0.7 and down 1 percentage point respectively compared with January. In terms of enterprise scale, the prosperity level of large and medium-sized enterprises has increased. The PMI index of large and medium-sized enterprises in February was 51.8% and 51.4% respectively, 0.2 and 0.9 percentage points higher than that in January, and the prosperity level increased. The PMI index of small enterprises recorded 45.1%, 0.9 percentage points lower than that in January, which has fallen for three consecutive months. The production and operation pressure of small enterprises is still large, which needs policy rescue urgently. However, after the festival, the manufacturing production and operation activities returned to normal and a series of steady growth policies were issued. The expected index of enterprise production and operation activities in February was 58.7%, 1.2 percentage points higher than that in January. Enterprises have strong confidence in the recent market development.
The prosperity level of the service industry has rebounded, and the construction industry is stable and good. In February, the business activity index of non manufacturing industry was 51.6%, up 0.5 percentage points from January, and the overall recovery of non manufacturing industry was accelerated. In terms of service industry, the business activity index of service industry in February was 50.5%. Although it increased slightly by 0.2 percentage points compared with the previous value, it is still weaker than the Spring Festival month in the same period of previous years. Retail, residential services and other industries are relatively affected by the epidemic, and the business activity index is in the low range of less than 45.0%, showing a relatively sluggish performance. However, from the perspective of market expectations, the expected index of business activities in the service industry recorded 59.6%, an increase of 2.9 percentage points over the previous month. With the implementation of a series of relief policies, the marginal impact of the superimposed scattered epidemic on consumption is weakened, and the production of service industry and residents' consumption are expected to be repaired upward. In terms of the construction industry, the prosperity level was significantly improved, and the business activity index of the construction industry was 57.6%, an increase of 2.2 percentage points over the previous value. China's efforts to stabilize growth have been gradually strengthened. Local governments and various industries are intensively deploying measures to stabilize investment and growth. Some major infrastructure projects and projects are carried out moderately ahead of schedule. Construction enterprises have better expectations for the development of the industry. The expected index of business activities of the construction industry recorded 66% in February, up 1.6 percentage points from the previous value.
Overall, the continuous promotion of the steady growth policy led to the steady recovery of the PMI index in February. Disturbed by factors such as Chinese new year shutdown and epidemic spread, in February, the comprehensive PMI output index was 51.2%, 0.2 percentage points higher than the previous value, and the comprehensive PMI output index increased slightly, indicating that the steady growth policy has achieved initial results and the expansion of production and business activities of Chinese Enterprises has accelerated. However, we still need to see that there are still many prominent problems in the current production and operation of enterprises. Geopolitical conflicts may lead to high commodity prices in the short term, raising the production and operation costs of enterprises. Residents' consumption may continue to be repeatedly disturbed by China's scattered epidemic. Small enterprises urgently need the continuous introduction of policies. However, since the beginning of 2022, many departments have made intensive publicity on steady growth and released positive policy signals. Judging from the current position of the management, the expectation of steady growth is constantly strengthened. The government report of the two sessions in March is expected to continue the loose tone of policies, and is expected to give clear ideas in terms of aggregate target, fiscal policy, monetary policy, industrial policy and deficit ratio arrangement. It is expected to increase the intensity of steady growth on the whole, The manufacturing industry is expected to continue to rebound.
Risk tips: repeated outbreaks outside China, higher than expected changes in commodity prices, and higher than expected changes in China's policies.
