In December 2021, the comprehensive PMI index was 52.2%, unchanged from the previous month. The manufacturing PMI increased by 0.2 percentage points to 50.3%, and the non manufacturing business activity index increased by 0.4 percentage points to 52.7%.
First, the fall in upstream commodity prices eased the cost pressure of enterprises and led enterprises to start replenishing inventory. Moreover, it is certain that with the gradual mitigation of the mismatch between supply and demand, the overall downward trend of subsequent PPI is relatively certain. The continuous relief of cost pressure is an obvious good for manufacturing enterprises.
Second, external demand has dropped slightly, but it will maintain resilience in the future. The slight drop in export orders in December may be mainly due to the past holiday effect, overseas epidemic and the accelerated withdrawal of fiscal and monetary policies. However, the mismatch of the vaccine cycle and the spread of the epidemic will significantly support China’s export share, and it is expected that the subsequent export is expected to remain resilient.
Third, the industrial development driven by technological transformation and industrial upgrading will be the long-term driving force for the development of manufacturing industry. It is expected that the follow-up investment in manufacturing industry is expected to remain high driven by high-tech manufacturing industry.
Fourth, the decline of the construction industry index is largely due to the shutdown of construction sites as migrant workers return home for the Spring Festival at the end of the winter and the end of the year. However, with the landing of early-stage funds, the early issuance of special bonds, the return of workers after the festival, and the fall in the price of raw materials, the economic support of infrastructure construction next year deserves greater expectations.
Fifth, from the perspective of the real estate industry, the financing end has warmed up after the policy is relaxed. However, after the previous impact, the current residents’ wait-and-see mood is heavy, and follow-up attention will be paid to the changes on the demand side. The toughness of real estate in first tier cities and the effect of urban policies in second and third tier cities may drive the real estate industry into a virtuous circle gradually.
Sixth, the marginal impact of the epidemic on the economy is gradually weakening. We should pay attention to the repair of China’s consumption next year.
Seventh, generally speaking, the PMI data in December sent a signal that the economy began to repair gradually.
Next year, with the gradual development of policies, the easing of cost pressure and the short-term resilience of overseas demand, we believe that PMI is expected to continue to rise.
Risk statement
Pay attention to the repair of the epidemic situation.
（ Hongta Securities Co.Ltd(601236) ）
