In March, China's manufacturing PMI was 49.5%, down 0.7pct month on month; Non manufacturing PMI was 48.4%, down 3.2pct month on month; The prosperity of manufacturing and non manufacturing industries fell to the contraction range.
I. manufacturing: weak demand and rising prices
Manufacturing production contracted and demand fell. In terms of production, affected by the epidemic, some enterprises stopped production, and the manufacturing production index decreased by 0.9pct to 49.5% month on month, falling to the contraction range for the first time since November 2021. On the demand side, the new orders index fell 1.9pct to 48.8% month on month, significantly weaker than the seasonality. The manufacturing industry's outlook fell and its performance was weaker than market expectations. It was mainly affected by the impact of the epidemic, the continuous and intensified conflict between Russia and Ukraine, resulting in the rise of raw material prices, the reduction or cancellation of export orders of some enterprises, and the decline of exports.
Enterprise expectations weakened, and the expected index of production and operation activities fell 3.0pct to 55.7%, the first decline in six months. The expected index of production and operation activities of automobile, metal products, textile and garment industries fell to a low boom range of less than 45%. It is worth noting that the prosperity of enterprises continues to differentiate, but the degree of differentiation has converged. Large enterprises continue to be in the expansion range, while small enterprises have been in the contraction range for 11 consecutive months, but the contraction has eased, and the production and new order indexes have rebounded month on month, which may be related to the policy of helping enterprises to bail out and protecting market players.
The price index has increased significantly for three consecutive months, and the cost pressure of enterprises has increased. Affected by the continuous and intensified conflict between Russia and Ukraine, the rise of international commodity prices has driven the increase of raw material procurement costs and product prices in relevant industries, and the purchase price and ex factory price index of raw materials have increased month on month.
The inventory of finished products of enterprises rose passively. On the one hand, the rising price of raw materials and the increasing cost pressure of enterprises suppressed the willingness of enterprises to replenish inventory. In March, the raw material inventory of manufacturing enterprises continued to decline by 0.8pct to 47.3%; On the other hand, due to the rapid drop in demand and the impact of the epidemic, the logistics transportation was not smooth and the delivery cycle was prolonged. In March, the finished product inventory of manufacturing enterprises rebounded by 1.6pct to 48.9%.
