In December 2021, the official manufacturing PMI was 50.3, an increase of 0.2 percentage points over the previous value. Among the five sub items, only the production was above the boom and bust line, but decreased by 0.6 percentage points to 51.4 compared with November. Although the other four sub items were slightly repaired, they were all below the boom and bust line. PMI of non manufacturing industry rose from 52.3 to 52.7, up 0.4 percentage points from the previous value, of which the construction industry decreased by 2.8 percentage points to 56.3 and the service industry increased by 0.9 points to 52.
Manufacturing PMI continued to rise this month, but only production and procurement were above the boom and bust line, and all sub items of demand continued to be below the boom and bust line. Inventory rebounded significantly, and enterprises replenished inventory or pushed up PMI. In December, although the manufacturing PMI rebounded slightly, only production and procurement were above the boom and bust line, 51.4 and 50.8 respectively, while the relevant sub items of demand were below the boom and bust line. In the past two months, the cumulative rise of finished product inventory and raw material inventory has reached 2.2 points, and the improvement range is significantly greater than the demand index, reflecting that after the decline of raw material prices and the impact of production restriction, the recovery of enterprise inventory replenishment demand may be an important factor pushing up PMI in the near future, and the improvement range of demand is not large.
PMI of non manufacturing industry rebounded slightly, including the decline of business activities and new orders in construction industry, and the recovery of infrastructure may be slow. PMI new orders in the construction industry are highly related to the demand for infrastructure real estate. Since the second half of the year, PMI new orders in the construction industry have remained at a historically low level. The progress of fiscal expenditure accelerated from October to November, and the PMI new order index in the construction industry rebounded. The new orders in the construction industry fell again this month, which may reflect the slow recovery speed of infrastructure. In the future, although the demand for steady growth of the central economic work conference has been improved, fiscal policy still needs to focus on accuracy and sustainability. A few days ago, the national financial work video conference also proposed to "improve the local government's appropriate borrowing mechanism according to law" and "manage and make good use of special bond funds". It is expected that the recovery of infrastructure investment is limited.
Generally speaking, the manufacturing PMI rebounded slightly this month, but from the perspective of sub items, only production and procurement are above the boom and bust line, and each sub item of demand continues to be below the boom and bust line. Finished product inventory and raw material inventory rebounded, while demand rebounded slightly, pointing to the decline in raw material prices and the decline in the impact of production restrictions. The demand for enterprise inventory replenishment pushed up PMI, but the economic momentum was still weak. The PMI of the construction industry falls near the boom and bust line, the recovery of infrastructure may be slow, and the economy is expected to continue to be under pressure.
Risk warning: epidemic development exceeds expectations, credit risk exceeds expectations, etc
