Event: according to the data of the National Bureau of statistics, in November, China’s Manufacturing Purchasing Manager Index (PMI) was 50.1%, 0.9 percentage points higher than that of the previous month, and returned to the expansion range after being below the critical point for two consecutive months; in November, the non manufacturing business activity index was 52.3%, 0.1 percentage points lower than that of the previous month, and the prosperity level fell slightly.
The specific interpretation is as follows:
In terms of manufacturing, first of all, in the past decade, the manufacturing PMI index in November was “5 up, 1 flat and 4 down” compared with the previous month. This means that there is no obvious seasonal law in the fluctuation direction of the index in November, which basically reflects the marginal change of the kinetic energy of real economic growth.
Secondly, from the perspective of index composition, PMI rose sharply by 0.9 percentage points month on month in November, returning to the expansion range, mainly from the production side. The production index of the month was 52.0%, a sharp increase of 3.6 percentage points over the previous month, indicating that the effect of the recent industrial steady growth policy represented by ensuring coal supply and increasing production began to appear. We judge that the industrial added value data in November is expected to continue to improve.
Third, with the increase of supply, the rise of industrial prices slowed down significantly, and the two price indexes in the manufacturing PMI fell sharply in November. Among them, the purchase price index and ex factory price index of main raw materials were 52.9% and 48.9% respectively, down 19.2 and 12.2 percentage points from the previous month, and the ex factory price index fell below the critical point. High frequency data showed that the price increase of “three black and one color” and basic chemical products decreased significantly in November. This means that the PPI in November is expected to fall to around 10% year-on-year from the historical high of 13.5% last month.
Fourth, the demand index is still weak. In November, the new order index in the manufacturing PMI was 49.4%, up 0.6 percentage points from the previous month, but still in the contraction range. Affected by the weakening price rise of upstream raw materials, the demand index of chemical raw materials and chemicals, ferrous metal smelting and calendering industries is in the low range below 43.0%, which is an important drag factor. However, the overall slow consumption of residents is still the main reason restricting demand. In the next step, macro policies will further promote consumption.
Fifth, the prosperity of small and medium-sized enterprises has improved, but the PMI of small enterprises continues to be in the contraction range. In November, the PMI of large enterprises was 50.2%, which remained above the critical point, basically the same as that of the previous month. The PMI of medium-sized enterprises was 51.2%, ending the contraction trend for two consecutive months and rising above the critical point. The PMI of small enterprises was 48.5%, an increase of 1.0 percentage points over the previous month. The prosperity of small enterprises has improved, but it continues to be in the contraction range. We believe that it is difficult to narrow the ppi-cpi scissors gap significantly at present and in the future, and the operation of small and micro enterprises will still face great difficulties. Considering that small enterprises are the main force to absorb employment, there is still room for further weighting in the follow-up targeted support policies for small and micro enterprises.
Sixth, the export index rebounded in November, but the future export situation is not optimistic. Mainly affected by the approaching Christmas consumption season abroad and other factors, the new export order index rebounded by 1.9 percentage points to 48.5%. However, the new export order index has been in the contraction range for seven consecutive months, It is consistent with the downward trend of export freight volume fluctuation since the second half of the year (the new export order index counts the export volume, not the export volume). We estimate that although the growth rate of export volume is expected to remain at about 20% in November, the momentum of export growth tends to weaken in the fourth quarter, and this momentum will further appear in the first quarter of next year. In this way, with the gradual weakening of the driving effect of export on China’s economy in the future, the domestic demand will be as high as possible Come up at the top.
In terms of non manufacturing industry, the index level in November decreased slightly by 0.1 percentage points compared with the previous value, mainly for two reasons: first, this round of multi-point epidemic spread to many areas, and some industries were greatly affected. Among them, the business activity index of life service industry closely related to contact consumption fell below the critical point, accommodation The business activity index of culture, sports and entertainment industries fell sharply to 46.0% and below, and the market activity decreased significantly. Second, the current real estate market continues to cool down, and the prosperity level of the related service industry will also decline.
In November, the PMI index of the construction industry rose to 59.1%, an increase of 2.2 percentage points over the previous month, mainly driven by infrastructure construction. From the perspective of the industry, the business activity index of civil engineering construction industry was 60.5%, an increase of 5.4 percentage points over the previous month, indicating that with the gradual implementation of some major projects in the 14th five year plan, the progress of infrastructure construction has been accelerated. This also means that the current steady growth of infrastructure is making efforts. We judge that with the negative growth of real estate investment, the construction activities related to real estate will slow down in the near future.
On the whole, the PMI index in November shows that the current marginal recovery of economic expansion kinetic energy, the economic downward trend has eased since the third quarter, the rising momentum of industrial prices has also entered the downward inflection point, and the phenomenon of “quasi stagflation” in the macro economy has eased. We judge that this means that the urgency of macro policy adjustment towards easing before the end of the year has decreased. However, under the background of new changes in the overseas epidemic and China’s economic operation still faces great downward pressure, the regulators will closely observe the economic operation situation and stabilize expectations and growth in time. Overall, the trend of policy easing at the end of this year and the beginning of next year will not change in direction due to the rebound of manufacturing PMI in November.
