Key investment points:
Event on March 1, 2022, the service industry survey center of the National Bureau of statistics and China Federation of logistics and procurement released the China procurement manager index. Among them, the manufacturing PMI index was 50.2%, up 0.1 percentage points from the previous month. Non manufacturing PMI was 51.6%, up 0.5 percentage points from the previous month.
Manufacturing PMI rebounded slightly, and the production index fell seasonally. In February, the manufacturing PMI index was 50.2%, up 0.1 percentage points from the previous month. From the perspective of enterprise scale, the PMI of large and medium-sized enterprises increased by 0.2 and 0.9 percentage points respectively compared with the previous month, while the PMI of small enterprises decreased by 0.9 percentage points compared with the previous month, and was at the low point since March 2020. The epidemic factors superimposed seasonal effects, and the speed of production expansion slowed down. The PMI production index in February was 50.4%, down 0.5 percentage points from the previous month. The epidemic occurred in many places in February, and the production expansion of enterprises was restrained to a certain extent. At the same time, affected by the suspension of production during the Spring Festival holiday, the speed of production expansion showed a seasonal decline, but the decline range was lower than that in the same period since 2018. In the next stage, considering that the production activities of enterprises will gradually return to normal after the Spring Festival, and relevant departments have successively issued a series of policies to promote the steady growth of industrial economy, the current production and operation activities of enterprises are expected to be at a high level, and the expansion of enterprise production is expected to be accelerated, but we still need to pay attention to the progress of epidemic prevention and control in China.
New orders returned to the boom range, and the demand improved significantly. In February, the new order index was 50.7%, which returned to the boom range, up 1.4 percentage points from the previous month, and the improvement rate was higher than that of the same period in previous years. Among them, new export orders were 49.0%, up 0.6 percentage points from the previous month, and PMI import index was 48.6%, up 1.4 percentage points from the previous month. In terms of external demand, export performance is relatively strong. The demand for replenishment in the United States and other countries is still at a high level. The continued epidemic in Southeast Asia has driven orders back to China, and the export performance is relatively strong. In the next stage, considering that the situation of overseas epidemic prevention and control is difficult to improve significantly in the short term, the logic of Southeast Asian orders returning to China remains unchanged, and the demand for replenishment is superimposed, so the export may continue to perform well in the short term. In terms of domestic demand, with the help of steady growth policies such as moderately advanced infrastructure activities, the issuance and landing of special bonds accelerated, driving infrastructure to significantly stimulate domestic demand. In the next stage, domestic demand is expected to be further boosted, taking into account the sustained force of the steady growth policy. However, we still need to pay attention to the impact of policies such as tightening the supervision of implicit debt of local governments on infrastructure investment.
The price data went up. Enterprises passively destocked. In February, the ex factory price of PMI increased by 3.2 percentage points to 54.1%, and the purchase price of PMI increased by 3.6 percentage points to 60.0%. The difference between PMI ex factory price and purchase price was - 5.9%, down 0.4 percentage points from the previous month. We believe that due to the influence of offshore politics and other factors, the prices of oil and other bulk commodities have increased significantly, resulting in the squeeze on the profit space of enterprises. From various data, enterprises passively destock. The inventory of finished products in February was 47.3%, down 0.7 percentage points from the previous month; The inventory of raw materials was 48.1%, down 1.0 percentage points from the previous month. In February, the purchase volume index increased by 0.7 percentage points to 50.9%, reflecting the phenomenon of passive destocking of enterprises under the background of warmer demand and slower production expansion.
Employment data improved. The number of manufacturing employees in February was 49.2%, up 0.3 percentage points from the previous month, reaching a new high since September 2021. The number of non manufacturing employees was 48.0%, up 1.1 percentage points from the previous month. Considering the high expectation of enterprise production and operation activities, the employment outlook of enterprises has rebounded, driving the improvement of employment data.
On the whole, exports and infrastructure have become the two key drivers of steady economic growth, driving the performance of the manufacturing PMI index to exceed expectations. In the next stage, on the production side, the enterprise's production and operation expectations are high. With the gradual implementation of relevant policies, the enterprise's production expansion speed is expected to increase. On the demand side, the export will still perform well in the short term under the action of multiple factors such as the return of orders and the high demand for replenishment overseas. In terms of domestic demand, under the main tone of the steady growth policy, infrastructure investment is expected to underpin the economy, but we still need to pay attention to the impact of regulatory policies such as implicit debt control of local governments on the scope of infrastructure development.
The risk suggests that the epidemic prevention and control is less than expected, the inflation is higher than expected, and the policy implementation is less than expected.
