In December, the purchasing managers’ index of China’s manufacturing industry was 50.3%, up 0.2pct from the previous month, higher than the critical point; The non manufacturing business activity index was 52.7%, up 0.4pct from the previous month and in the expansion range for four consecutive months.
1、 Manufacturing: marginal demand warms up and prices continue to fall
Manufacturing supply fell month on month, and the warming of demand margin became the main driving force to lift the manufacturing index. The manufacturing production index fell 0.6pc to 51.4% month on month, and the new orders index rose 0.3pct to 49.7%. In terms of production, the “double control” policy was relaxed in December, but it continues. With the superposition of the impact of the outbreak of Xi’an epidemic, the repair momentum of production activities is weaker than that of the previous month. In terms of demand, the decline of upstream prices combined with the start of pre holiday reserve mining has driven the recovery of demand margin, the increase of enterprise raw material inventory and the expected improvement of production and operation activities. By industry, the upstream and downstream differentiation of the manufacturing industry continued, the prosperity of upstream raw materials continued to decline, and the downstream consumption continued to improve. The “dual control” policy still significantly suppressed upstream enterprises, the outlook of upstream raw materials continued to be depressed, and the PMI of ferrous metals, non-ferrous metals and petroleum processing fell to a low level month on month, significantly lower than the average value in recent years; In the consumer category, the manufacturing of computer communication equipment continued to accelerate, the high level of automobile manufacturing fell, and the pharmaceutical manufacturing rose sharply to the level of previous years.
The export boom index continues to be in the contraction range, and the future export growth is still not optimistic. In December, the index of new export orders dropped by 0.4pct to 48.1% compared with the previous month. The seasonal growth effect brought by orders in the Christmas season subsided, and foreign demand may show a downward trend for a long time. However, Omicron virus led to a surge in new cases in the United States and Europe, or brought new uncertainty to the recovery of overseas supply. Driven by China’s increased energy import demand, the import index increased slightly by 0.1pct to 48.2% compared with the previous month, but with the price index peaking and falling one after another, the import may still decline in the future.
The price index continued to fall, ending the state of continuous high operation since this year. The purchase price index and ex factory price index of raw materials decreased by 4.8pct and 3.4pct to 48.1% and 45.5% month on month, both of which fell to the low point in recent half a year. The cost pressure of enterprises has weakened, and the suppression of prices on orders may continue to weaken.
2、 Non manufacturing industry: infrastructure construction slowed down and consumer services recovered
The non manufacturing business activity index rose 0.4pct to 52.7% month on month, mainly due to the strong recovery of consumer services.
The construction industry fell month on month, and the new order index of infrastructure and real estate fell. The business activity index of the construction industry this month was 56.3%, down 2.8pct from the previous month. In terms of new order index, as the issuance of new special bonds at the end of the year came to an end, the issuance work was basically completed, and the Spring Festival was approaching, the civil engineering and construction industry fell 3.5pct to 53.0% month on month, and the progress of infrastructure construction slowed down; The new order index of the housing construction industry fell 5.6pct to 46.6% from the previous month, falling to the contraction range. From the third batch of centralized land supply, state-owned enterprises and local government platform companies will replace private enterprises as the main investment force in the future.
The prosperity level of the service industry has picked up, and the consumer service industry has recovered. The index of business activity in the service sector rose 0.9pct to 52.0% month on month. The producer services business activity index fell slightly by 0.1pct to 57.5%, still in the high range. At the same time, the consumer services industry rebounded by 3.0pct to 51.0%, returning to the expansion range. However, the new order index has been below the critical point for seven consecutive months, indicating that the momentum of consumption repair is still weak. By industry, the prosperity of information and business services closely related to manufacturing activities is still at a high level, especially telecommunications and the Internet; Contact consumption activities recovered rapidly, and the accommodation industry rebounded by 20.9pct.
3、 Summary: slight expansion is expected to continue
In December, manufacturing PMI rose slightly, supply fell, demand warmed up, raw material inventory increased, prices continued to fall, the outlook of upstream raw materials was low, and the downstream consumer continued to improve marginally. Driven by the recovery of consumer services, non manufacturing PMI maintained expansion. With the end of the issuance of special bonds and the approaching of the Spring Festival, infrastructure investment orders fell, real estate investment remained depressed, and consumer services rebounded sharply. Looking ahead, PMI may still maintain a slight expansion next month.
