event:
On December 31, the National Bureau of statistics released the PMI index for December. The manufacturing PMI index recorded 50.3%, up 0.2 percentage points from the previous month.
comment:
The recovery of manufacturing PMI is partly due to the decline of raw material costs, the recovery of manufacturing PMI in some middle and upper reaches industries, or the gradual normalization of production and operation of some enterprises under the relief of cost pressure. In December, the manufacturing PMI index recorded 50.3%, up 0.2 percentage points from the previous month, mainly contributed by raw material inventory and new orders, up 1.5 percentage points and 0.3 percentage points respectively from the previous month, procurement volume and finished products both rose 0.6 percentage points, while raw material prices fell 4.8 percentage points. Benefiting from the price reduction of raw materials, the boom repair of some middle and upper reaches industries is more obvious. From the perspective of PMI of major industries, the boom of upstream chemical raw materials, chemical fibers, metal products and non-metallic products has improved significantly, and the boom of petroleum processing, non-ferrous smelting and black smelting closely related to raw materials has fallen to varying degrees; However, benefiting from the decline of commodity prices, the procurement volume and raw material inventory of petroleum processing and chemical raw materials have rebounded significantly. Under the differentiation of domestic and foreign demand, some middle and downstream industries also showed signs of improvement. In December, the PMI new order index recorded 49.7%, up 0.3 percentage points from the previous month, while the new export order index recorded 48.1%, down 0.4 percentage points from the previous month; In addition to some upstream industries, new orders for computer communication electronics, special equipment, textiles and clothing picked up, and the new export orders of the latter two fell significantly, which may reflect signs of improvement in China’s demand.
Behind the recovery of PMI, there may be hidden worries about the sustainability of demand repair and the downturn of small enterprises and service industry. Under the relief of cost pressure, whether domestic demand can replace external demand and bring about the continuous repair of demand may need to be further tracked. At present, the relief of raw material cost pressure is more to solve the interference of supply to the normal production order. In the final analysis, the improvement of prosperity depends on demand. Most of the previously booming industries benefited from the support of exports; Under the weakening trend of external demand, whether domestic demand can hedge the decline of external demand largely determines whether the improvement of the economy can continue.
The prosperity of different enterprises is divided, and the downturn of small enterprises points to the increase of employment pressure. In December, the PMI of large and medium-sized enterprises rose by 1.1 and 0.1 percentage points respectively, while the PMI of small enterprises fell sharply by 2 percentage points to 46.5%, a new low since March 2020; Among them, the production, new export orders and procurement volume of medium-sized and small enterprises have dropped significantly, the employees of small enterprises have also declined, and the employment pressure may increase day by day.
Under the repeated epidemic situation, whether the recovery of PMI in non manufacturing industry can continue still needs to be tracked. In December, the PMI of non manufacturing industry recorded 52.7%, up 0.4 percentage points from the previous month. Among them, the PMI index of service industry rose 0.9 percentage points from the previous month, mainly due to the weakening interference of catering and other service industries, but the activity expectation index fell sharply; The PMI index of the construction industry fell, and new orders fell sharply by 4.2 percentage points to 50%. The implementation of measures to stabilize growth may remain to be seen.
Reiterated view: the total volume may face the pressure of overshoot, the coexistence of economic structural highlights and pressure, and the employment pressure caused by the downturn of small, medium-sized and micro enterprises and some service industries is prominent, which needs to be further strengthened by steady growth. Follow up attention will be paid to the investment opportunities brought by the steady growth and the improvement of the volume and price of some industries under the “scene repair” after the epidemic (for details, see “looking for a” new steady state “: four main logic in 2022”).
Risk tip: the epidemic situation in the world and China is repeated, and the implementation of steady growth measures is less than expected.
