In March, both manufacturing PMI and non manufacturing PMI fell below the boom and bust line. Structural problems such as the backlog of orders in hand by manufacturing enterprises and the decline of new orders in the construction industry deserve attention. During the week, new variables affecting the follow-up trend of international energy prices continued to increase.
According to the data released by the National Bureau of statistics on March 31, the manufacturing PMI index in March was 49.5%, down 0.7 percentage points from February and below the boom and bust line. From the sub item data, the new order index in March was 48.8%, down 1.9 percentage points from February; The production index was 49.5%, down 0.9 percentage points from February; The raw material inventory index was 47.3%, down 0.8 percentage points from February; The employment index was 48.6%, down 0.6 percentage points from February; The supplier delivery time index was 46.5%, down 1.7 percentage points from February. Under the impact of the epidemic, the five major sub items of manufacturing PMI fell compared with February, and the decline of new orders and production was large. The impact of the epidemic on the production and demand of manufacturing industry was more obvious. The reasons are as follows: first, the epidemic in March caused enterprises in some areas to temporarily stop production and reduce production, affecting the normal production and operation activities of upstream and downstream enterprises; Secondly, the recent intensification of international geopolitical conflicts and the increased uncertainty of export orders of some enterprises have had a certain impact on the demand of manufacturing enterprises. The new export order index in March was 47.2%, down 1.8 percentage points from February.
The non manufacturing index fell. In March, the PMI index of non manufacturing industry was 48.4%, down 3.2 percentage points from February, and the business activities of non manufacturing industry contracted within the month. Both supply and demand of the construction industry are affected. The PMI index of the construction industry in March was 58.1%, 0.5 percentage points higher than that in February. The data structure shows that the construction industry is also affected by the epidemic. Specific to the performance of each sub item, the new order index was 51.2%, down 3.9 percentage points from February, the expected index of business activities was 60.3%, down 5.7 percentage points from February, and the employee index was 50.1%, down 5.7 percentage points from February. As a labor-intensive industry, the construction industry, short-term workers and orders were relatively affected by the epidemic.
Overseas, the international energy issue is one of the important concerns this week. On Wednesday local time, Germany issued an early warning on the risk of interruption of Russian natural gas supply, asked enterprises and consumers to start reducing natural gas consumption, and claimed that the move was aimed at dealing with the risk of possible interruption of Russian natural gas supply at any time. Subsequently, Russian President Vladimir Putin signed a presidential decree and announced that "from April 1, companies from non friendly countries should first open ruble accounts in Russian banks, and then pay for the purchased Russian natural gas through this account". In terms of oil prices, in response to the rise in gasoline prices, US President Biden authorized the release of 1 million barrels of strategic oil reserves every day in the next six months. A simple calculation based on this speed shows that the United States may realize the release of 180 million barrels of oil in the next six months, which is a record high; During the week, new variables affecting the follow-up trend of international energy prices continued to increase.
There are hidden worries about the US economic data in February. First, according to the data of the U.S. Department of Commerce on Thursday, the year-on-year growth rate of the U.S. PCE and core PCE price index in February rose to 6.4% and 5.4% respectively, reaching a new high since 1982 and 1983, with month on month growth rates of 0.4% and 0.6% respectively. The inflation pressure in the United States remained high. In terms of employment, the number of ADP employees in the United States increased by 455000 in March, the lowest since August last year, and the previous value increased by 475000. At present, the market's expectation of the Fed's accelerated interest rate hike continues to rise. During the week, the two-year and 10-year yield curves of U.S. Treasury bonds appear upside down for the first time since August 2019. The employment margin is weakened and inflation is high, or this expectation may be further strengthened.
Risk tip: global inflation is rising too fast; Liquidity flows back to US debt; The global impact of co19-vid has expanded.
