Event: manufacturing pmi47 in April 2022 4% (former 49.5%); Non manufacturing pmi41 9% (former value 48.4%).
Core view: the impact of the epidemic in April was fully revealed. In addition to the strong continuation of infrastructure, the PMI of manufacturing / service industry / sub items fell almost across the board again on the basis of the low level in March, which also pointed to the bottom of the economy again in April. Continue to remind, combined with the latest statement of the Politburo meeting on April 29, the country has a strong determination to "stabilize confidence, expectations and market", 5.5% still needs to be achieved, the general direction of follow-up policies is still to make every effort to stabilize growth, and focus on the progress of "optimization of epidemic prevention and control, loosening of real estate, expansion of infrastructure and implementation" in the short term. On the whole, the policy bottom has been realized, and the economic bottom and market bottom continue to grind.
In January and April, the PMI of manufacturing and non manufacturing industries fell sharply, and the impact of the epidemic appeared in an all-round way. In April, the PMI of manufacturing and non manufacturing industries were 47.4% and 41.9%, down 2.1 and 6.5 percentage points respectively compared with the previous month. Considering that the epidemic situation in April had a wider impact, stronger prevention and control efforts, and the impact was significantly greater than that in March (for details, please refer to the comprehensive assessment of the economic impact and evolution characteristics of the current epidemic situation), it is expected that the PMI fell significantly this month. In April, the PMI of service industry fell 6.7 percentage points to 40.0%, the PMI of construction industry fell 5.4 percentage points to 52.7%, and the comprehensive PMI output index fell 6.1 points to 42.7%, pointing to the overall decline of the overall economic prosperity level.
2. By item, we can focus on the five signals of supply and demand, trade, price, inventory and Employment:
1) under the influence of the epidemic, both supply and demand are weak, the decline of supply is less than that of demand, and the decline of domestic demand is greater than that of external demand. On the supply side, the PMI production index in April was 44.4%, down 5.1 percentage points from the previous month; Under the influence of the epidemic, falling demand and increasing difficulties in logistics and transportation are the main reasons. From the perspective of industry, textile and garment, agricultural and sideline food processing, chemical products, medicine, non-ferrous smelting and non-metallic mineral products have increased against the trend. On the demand side, the PMI new orders and new export orders index fell 6.2 and 5.6 percentage points respectively in April, pointing to that under the influence of China's epidemic, the decline of domestic demand was greater than that of external demand.
2) import and export orders dropped significantly, and exports are expected to continue to decline in April. On the export side, new export orders fell by 5.6 points to 41.6% in April. Combined with the decline of CCFI container freight rate and port foreign trade throughput growth in April, China's exports are expected to continue to decline in April; On the import side, import orders fell 4 points to 42.9% in April, verifying the weakening of domestic demand.
3) the high price fell slightly, and it is expected that the PPI in April will continue to fall to about 7.8% year-on-year; Logistics slowed sharply and inventory accumulated passively. On the price side, the raw material price and ex factory price index fell by 1.9 and 2.3 percentage points respectively in April, which was significantly less than that on the supply and demand side and remained at a high level in recent years. Under the influence of higher base, PPI is expected to continue to fall to about 7.8% year-on-year in April (8.3% in March). On the inventory side, PMI raw material inventory decreased by 0.8 percentage points to 46.5% in April, the fourth consecutive month of decline, which should be related to the suppression of purchase intention by high prices; The inventory of finished products rebounded by 1.4 percentage points to 50.3%, a new high since 2013, which should be related to logistics difficulties and poor sales of finished products. The performance is that the supplier's distribution time index fell sharply by 9.3 points to 37.2%, and the logistics speed slowed down significantly. It should be noted that with the development of the "supply chain protection" policy, the logistics situation has shown signs of improvement since mid April.
4) the prosperity of large and medium-sized enterprises shrank in an all-round way, employment generally deteriorated, and the unemployment rate is expected to continue to rise in April. In April, the PMI of large, medium and small enterprises fell by 3.2, 1.0 and 1.0 percentage points respectively, all in the contraction range; In terms of employment, the employment index of manufacturing industry, service industry and construction industry fell by 1.4, 0.8 and 7.0 points respectively in April. Employment generally deteriorated, which should also be affected by the epidemic. It is expected that the unemployment rate in April will further deteriorate on the basis of 5.8% in March.
5) the boom of the service industry generally fell, the boom of the civil engineering construction industry is still at a high level, and the infrastructure may continue to increase in April. In terms of the service industry, due to the severe impact of the epidemic, the PMI of the service industry fell 6.7 percentage points to 40.0% month on month in April, and 19 of the 21 industries were in the contraction range. In the construction industry, the PMI of the construction industry fell by 5.4 percentage points to 52.7% in April, of which the PMI of the civil engineering construction industry was 61.0%, which was in the high boom range for two consecutive months, and the new order index was 52.3%. It continued the expansion trend, pointing to the rapid construction progress of infrastructure projects, and the investment in infrastructure may continue to increase in April. Again, it is suggested that the growth rate of infrastructure this year may be about 8% or even higher. Pay close attention to the investment opportunities of infrastructure chain.
3. On the whole, the impact of PMI pointing to the epidemic in April was fully apparent. China's economy has declined significantly in March and will further bottom in April. Looking back, the Politburo meeting on April 29 was more worried about the economy, but still stressed that the goal of about 5.5% should be achieved. It once again reminded that the country has a strong determination to stabilize confidence, expectations and markets, and the general direction of follow-up policies is still to make every effort to stabilize growth; The end of China's policy has been realized, and the economic bottom and market bottom continue to grind. In terms of countermeasures, the biggest focus of the Politburo meeting: loosening real estate (more positive attitude; focusing on the possible deregulation of the first and second lines of the core), expanding infrastructure (the first mention of comprehensively strengthening infrastructure), epidemic prevention and control is likely to be gradually optimized, further strengthening the implementation of policies and paying attention to "incremental tools".
Risk warning: unexpected changes in epidemic situation, external environment and policy implementation
