Event: manufacturing pmi50 in November 1. Expected value: 49.7, former value: 49.2; Non manufacturing pmi52.5 in November 3, the former value is 52.4. In November, the business condition index (BCI) of Chinese enterprises was 49.2, with the previous value of 51.6.
Manufacturing: supply and demand improved, supply recovery was stronger than demand, external demand improved better than domestic demand, prices fell and inventories rebounded.
The overall outlook of the manufacturing industry stabilized and rebounded. In November, the manufacturing PMI was 50.1%, up 0.9 percentage points from the previous value, and returned to above the boom and bust line after two months. Specifically:
1) Supply and demand improved, in which the recovery of supply boom was greater than demand, and the improvement of external demand was greater than domestic demand. On the supply side, PMI production in November was 52%, up 3.6 percentage points from the previous value, and also ended five consecutive declines, indicating that the policy of "ensuring supply and stabilizing price" of the national development and Reform Commission has achieved results, and the supply has recovered in November. The national development and Reform Commission said that since October this year, coal supply has increased by more than 30% compared with the same period last year, which continues to be greater than coal consumption. The coal storage of power plants has rebounded rapidly. On November 23, the coal storage of power plants across the country has reached 147 million tons, which can provide a strong guarantee for power generation and heating this winter and next spring. According to high-frequency data, the operating rates of upstream and downstream industries are differentiated. The operating rate of blast furnace in iron and steel industry is lower than that in October, the operating rate of PTA in chemical industry is higher than that in October, and the operating rates of all steel tires and semi steel tires are higher than that in October. On the demand side, in November, PMI new orders and new export orders rose by 0.6 and 1.9 percentage points to 49.4% and 48.5% respectively compared with the previous month. Although they have rebounded, they are still in a low position. Among them, PMI new orders have been lower than the boom and bust line for four consecutive months, and PMI new export orders have been lower than the boom and bust line for seven consecutive months. In addition, PMI imports rose 0.6 percentage points to 48.1%, lower than the boom and bust line for six consecutive months. From this perspective, the demand recovered in November, but it is still weak. The rebound of PMI new orders and PMI imports is less than that of PMI new export orders, reflecting that foreign demand is slightly better than domestic demand.
2) Export orders continue to deviate from the export amount, mainly due to the high freight rates and global commodity prices, which will gradually return to unity next year; Christmas demand was boosted, new export orders in November were also improved compared with the previous value, and it is expected that short-term exports will still be supported. As of October, PMI's new export orders have been in the contraction range for six consecutive months, but the export amount has maintained a high-speed growth of more than 20% year-on-year. The deviation between the two is due to: first, PMI's new export orders are newly signed, while the customs export amount is the actual export situation, and the former usually takes the lead. Second, due to the rise of freight rates and upstream raw material prices, some export enterprises took a wait-and-see attitude and reduced their willingness to sign orders. At the same time, the price boosted the export amount, resulting in the decline of orders, but the export amount was still high. It is expected that as the global supply chain crisis eases and raw materials and freight rates return to normal, the deviation between new export orders and export amount will be alleviated.
3) The effect of the policy of "ensuring supply and stabilizing price" appears, the price decreases month on month, and the PPI is expected to fall year-on-year in November; Enterprise inventory rebounded. In terms of price, in November, the purchase price and ex factory price of PMI raw materials decreased by 19.2% and 12.2 percentage points respectively to 52.9% and 48.9% compared with the previous value, of which the ex factory price fell below the boom and bust line for the first time in 17 months, combined with the fact that the Nanhua industrial products index fell by 13.7% month on month in November, and the price index of means of production fell by 0.8% month on month as of November 19, It is expected that PPI may fall to about 12% year-on-year in November. In terms of inventory, the inventory of PMI raw materials and finished products rose by 0.7 and 1.6 percentage points to 47.7% and 47.9% respectively in November, which should be related to the recovery of supply better than demand in November.
Non manufacturing industry: the boom of service industry continued to decline, mainly due to the disturbance of epidemic situation; High frequency data show that real estate sales have improved slightly, which still needs to be observed; The rebound of the construction industry may be related to the issuance of special bonds and the marginal adjustment of real estate policies.
In November, the non manufacturing PMI business activity index fell slightly by 0.1 percentage points to 52.3% month on month, in the expansion range for three consecutive months. Among them, the PMI of the service industry fell by 0.5 percentage points to 51.1%, falling for two consecutive months, mainly due to the local rebound of the epidemic and the downturn of the real estate boom. It should be noted that the high-frequency indicators show that the margin of real estate sales boom in November has improved slightly. As of November 28, the average weekly transaction area of commercial housing in large and medium-sized cities on November 30 was 3.09 million square meters, higher than 2.87 and 2.89 million square meters from September to October. Follow up observation is still needed. The PMI of construction industry and the new order index of construction industry rose by 2.2 and 1.9 percentage points to 59.1% and 54.2% respectively, indicating that the issuance of special bonds (net financing of 564 billion yuan in November) and the marginal adjustment of real estate policy have played a supporting role in the demand for construction.
Small and medium-sized enterprises and Employment: the prosperity of small enterprises is still poor and the employment pressure is still great.
1) According to the types of enterprises, the prosperity of small enterprises is still poor. In November, the PMI of large, medium and small enterprises changed by - 0.1, 2.6 and 1.0 percentage points to 50.2%, 51.2% and 48.5% respectively, indicating that the prosperity of small and medium-sized enterprises has improved significantly, but the PMI of small enterprises is still in the contraction range for seven consecutive months, and the prosperity is still poor. The business condition index of Chinese enterprises (BCI) also shows that the prosperity of small and medium-sized enterprises is weak. In November, the BCI index fell by 2.37 percentage points to 49.22% compared with the previous value. In the sub index, except for the recovery of inventory forward-looking index, other sales, profit and financing environment indexes fell by 2.58, 6.83 and 0.37 percentage points to 66.49%, 47.07% and 43.94% respectively compared with the previous value.
2) The employment pressure is still high. In November, the employment index of manufacturing, service and construction industries changed by 0.1, 0.0 and - 1.1 percentage points respectively to 48.9%, 46.6% and 51.3% compared with the previous value. Among them, the PMI of manufacturing employees was lower than the boom and bust line for 8 consecutive months, the service industry was lower than the boom and bust line for a long time, the construction industry fell sharply in November, and the employment pressure is still large as a whole.
The structural contradiction between supply and demand has eased. In November, the economic boom showed the characteristics of increased supply, weak demand, lower prices and poor small enterprises and employment. It is expected that while maintaining supply, future policies will make efforts in stabilizing employment, steady growth and expanding domestic demand, especially in terms of support for consumption, infrastructure construction and small and micro enterprises, and may also reduce the reserve requirement.
In November, the economy stabilized and the demand side remained weak. Manufacturing PMI shows that supply and demand have improved, supply is stronger than demand, and external demand is better than domestic demand. "Ensuring supply and stabilizing price" has achieved results, with prices falling and inventories rebounding. The prosperity of the service industry continued to decline due to the disturbance of the epidemic. High frequency data showed that the margin of real estate sales improved slightly and the landscape of the construction industry improved greatly. The prosperity of small enterprises is still poor and the employment pressure is still great.
At the policy level, the premier's Symposium and the central bank's Q3 monetary policy report raised more concerns about the economy. On November 19 and 22, the premier's Symposium re mentioned the "six stabilities and six guarantees", especially the market players to ensure employment and people's livelihood, and proposed to "implement the cross cyclical adjustment measures planned at the end of the year and the beginning of the year, so as to promote the economy to climb over the ridge", The Q3 monetary policy report of the central bank re mentioned "phased, structural and cyclical factors", and first mentioned "it is more difficult to maintain the stable operation of the economy". On the whole, the effect of "ensuring supply and stabilizing price" is obvious, but there is still great pressure on employment and growth, especially weak domestic demand. Combined with the interpretation of recent conference documents, we expect that while ensuring supply, policies may gradually exert force on the demand side, for example: 1) the premier's Symposium on November 19 stressed "driving more employment and residents' income and promoting consumption expansion"; 2) On November 24, the national Standing Committee deployed the work of special bonds, including "accelerating the issuance of the remaining quota this year, striving to form more physical workload at the beginning of next year, promoting the commencement of mature projects, issuing some quotas in advance, strengthening the audit and supervision of capital investment, and avoiding long-term idleness"; 3) On November 10, the general office of the State Council issued a document to support small and medium-sized enterprises, including 9 measures such as increasing financial support for rescue, reducing taxes and fees, and precise "drip irrigation" of financial instruments; 4) The Q3 monetary policy report of the central bank deleted the "general gate" and "do not engage in" flood irrigation ", and put more emphasis on the" bottom line thinking "to prevent systemic and secondary risks. We expect that the reserve requirement may be lowered again at the end of the year and the beginning of the year, and the structural support tools will become the norm. Follow up needs to pay attention to the signals and measures of the central economic work conference and the Political Bureau meeting at the end of the year.
Risk statement
The downward speed of real estate exceeded expectations, and the implementation of policies was less than expected.
