Key investment points
In November, the national manufacturing PMI returned to the expansion range. On the one hand, the supply and demand indicators both recovered, especially the production rebounded significantly, the production index rose to a new high since June this year, the early energy constraints were eased, which accelerated the production activities of the manufacturing industry, and the demand side also strengthened driven by external demand. We expect that economic growth will gradually stabilize. On the other hand, prices began to peak and fall. With the increasing implementation of the policy of “ensuring supply and stabilizing price”, the momentum of rapid price rise has been curbed, and the ex factory price and purchase price of raw materials have fallen sharply, which means that the pressure on the cost of raw materials will be gradually relieved, and the differentiation of small and medium-sized enterprises and large enterprises will tend to converge.
Manufacturing PMI returned to the expansion range. In November, the national manufacturing PMI rose from decline to 50.1%, ending the previous seven consecutive months of decline and returning to the expansion range, pointing to the recovery of the manufacturing boom. By industry, 12 of the 21 industries surveyed were above the critical point, an increase of 3 over the previous month, and the prosperity of the manufacturing industry has expanded. Among them, PMI in high-tech manufacturing, equipment manufacturing and consumer goods industries have rebounded to varying degrees, and the industry expansion has accelerated. Although PMI in high-energy consuming industries rebounded over the previous month, it is still offline. Among the main sub indicators, supply and demand both recovered, prices peaked and fell, and inventories were replenished.
The prosperity of small and medium-sized enterprises has improved. In terms of enterprise scale, PMI of large enterprises fell online; PMI of medium-sized enterprises returned to the line, ending the contraction trend for two consecutive months, in which the production index and new order index are on the line, pointing to the recovery of enterprise production and demand; PMI of small enterprises rebounded offline, and the prosperity improved synchronously.
The recovery of external demand drives the improvement of demand. In November, the new order index rebounded to 49.4%, but it was still offline, and hit a new low in the same period in 13 years, pointing to the improvement of low demand. Among them, agricultural and sideline food processing, food, wine, beverage, refined tea and other industries have entered the traditional peak season, and the demand has risen to a higher boom range, while the demand of wood processing, chemical industry, steel and other industries is still weak. Affected by the continuous recovery of the world economy, the approaching overseas Christmas consumption season and other factors, the new export order index rose to 48.5% in November, at the medium level over the same period over the years, pointing to the recovery of external demand. Among them, the new export order index of pharmaceutical, automobile, electrical machinery and other industries was more than 3 percentage points higher than that of the previous month and reached the expansion range.
Production rebounded significantly and energy constraints eased. In November, the production index rebounded sharply to 52%, returning to the expansion range and reaching a new high since June this year, pointing to the easing of energy constraints, which accelerated the release of manufacturing capacity. Among them, the production index of papermaking and printing, railway and shipbuilding, electrical machinery and other industries was higher than 56.0%, and the industrial production activities were significantly accelerated.
Prices peaked and fell. In November, the purchase price index of main raw materials fell sharply to 52.9%, a new low since June of 20 years, and the ex factory price index fell to 48.9% simultaneously, which fell offline for the first time since June of 20 years. Recently, the implementation of the policy of “ensuring supply and stabilizing price” has been strengthened, and the momentum of rapid price rise has been curbed. Among them, the two price indexes of chemical, iron and steel, nonferrous metals and other industries have dropped significantly to the offline, indicating that the purchase and product sales prices of some raw material production industries have decreased significantly. Since November, the international oil price has fluctuated downward, China’s coal price has continued to fall, and the steel price has also fallen simultaneously. It is expected that the year-on-year growth rate of PPI will peak and fall in November.
Inventory has been replenished. In November, the raw material inventory index rose to 47.7%, and the finished product inventory index rose to 47.9% simultaneously. The stronger production demand made the inventory replenished
Risk tip: policy changes, economic recovery is less than expected.
