Event:
In April 2022, the official manufacturing PMI recorded 47.4%, down from - 2.1pcts last month; Non manufacturing PMI recorded 41.9%, down from - 6.5pcts last month, including construction PMI 52.5% 7%, compared with -5.4pcts in the previous month, pmi40.5% in the service industry 0%, compared with the previous month -6.7pcts; The comprehensive PMI output index was 42.7%, down from - 6.1pcts last month.
Core view:
Demand and production went down simultaneously. The manufacturing PMI weakened in April, recording the lowest value since March 2020: the official manufacturing PMI recorded 47.4% in April 2022, the lowest value since March 2020. The month on month downward trend was significantly different from the manufacturing PMI in April before the epidemic (20052019) compared with the average upward line of PMI in March + 0.3pcts, indicating that the manufacturing boom in April was significantly lower than that in March. Structurally, the simultaneous decline of new order PMI and production PMI is the main reason for the decline of official manufacturing PMI this month. Under the condition that the PMI supplier delivery time index drives the PMI up by 1.4 percentage points, resulting in a certain "virtual increase" in the PMI index, it still drives the manufacturing PMI down by more than 2 percentage points. The PMI of large and medium-sized enterprises decreased compared with that of the previous month. The PMI of large enterprises fell below - 3.2pcts, from above the boom and bust line of the previous month to below the boom and bust line, and the PMI of medium-sized and small enterprises were -1.0pcts.
The impact of the epidemic deepened, the logistics congestion was serious, and the decline in production and demand increased at the same time: the impact of the epidemic deepened in April. The PMI new order index and production index were -6.2pcts and -5.1pcts respectively on the basis of March, and the decline in production and demand increased at the same time. The new export order index recorded 41.6%, compared with - 5.6pcts last month, indicating that domestic and foreign demand weakened significantly at the same time, and the weakening range of domestic demand was greater. In April, the PMI supplier delivery time index recorded 37.2%, the second lowest in history after the outbreak of the epidemic in February 2020 (PMI supplier delivery time index 32.1% in February 2020), reflecting the significant increase in logistics and transportation difficulties. In April, the vehicle freight flow index, the throughput index of distribution centers of major express enterprises and the throughput index of public logistics parks decreased significantly month on month and year on year, indicating that the national logistics in April was blocked to a great extent compared with March and the same period last year. Under the obstruction of logistics, enterprises have limited access to raw materials, overstocked inventories of finished products, some enterprises have reduced production and stopped production, production has decreased significantly, and market demand continues to decline, resulting in the decline of PMI production index and new order index.
PMI ex factory price index and main raw material price index are down, and PPI is expected to decline month on month and year-on-year in April: PMI ex factory price index and PMI main raw material purchase price index in April were 54.4% and 64.2% respectively, down from -2.3pcts and -1.9pcts last month, respectively. PMI ex factory price index - the purchase price index of PMI's main raw materials fell to -9.8pcts from -9.4pcts last month. In the short term, the profits of middle and lower reaches manufacturing enterprises may continue to bear the squeeze of cost side. On the whole, although the upward movement of oil and coal prices will slow down the downward speed of PPI, it is expected that the PPI in March will be about + 8.0% year-on-year under the action of tail raising factors, which is still lower than that in February.
The service industry was seriously impacted by the epidemic, and the construction industry was also affected by the epidemic, and the expansion momentum weakened: in April 2022, non manufacturing pmi41 9%, up from -6.5pcts last month. Among them, the construction industry pmi52 7%, compared with -5.4pcts in the previous month, pmi40.5% in the service industry 0%, compared with -6.7pcts in the previous month. The service industry has been seriously impacted by the epidemic, and the prosperity has dropped significantly. In the construction industry, the epidemic has affected the landscape of the construction industry to a certain extent, but the forward infrastructure still provides some support for the construction industry. The business activity index of 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%, continuing the expansion trend.
Follow up judgment: the recovery of manufacturing industry, service industry and construction industry depends on the progress of epidemic prevention and control. Overall, PMI data reflect that under the impact of the epidemic, the downward pressure of manufacturing and non manufacturing industries (especially the service industry in non manufacturing industries) has increased rapidly in the short term. In the future, the recovery of manufacturing, service and construction industries depends on the progress of epidemic prevention and control. In terms of epidemic prevention and control, the Politburo meeting on April 29 proposed to adhere to dynamic zeroing, which means that the current tone of strict prevention and control will not change significantly, but it also proposed to effectively coordinate epidemic prevention and control and economic and social development according to the new characteristics of virus variation and transmission, so as to minimize the impact of the epidemic on economic and social development. From the high-frequency data, the vehicle freight flow index, the throughput index of distribution centers of major express companies and the throughput index of public logistics parks have continued to rise since mid and late April. This trend is expected to continue when more flexible epidemic prevention and control policies are introduced and a series of policies to ensure the supply chain are effective. The Politburo meeting on April 29 called for efforts to achieve the expected goal of economic and social development for the whole year, which showed that the GDP growth target of about 5.5% remained unchanged this year. Therefore, the follow-up policies must be more active, and the steady growth policies in all aspects need to be combined. With the strong stimulus of steady growth policy, more accurate and flexible epidemic prevention policy expectation and the promotion of supply chain protection policy, the manufacturing, service and construction industries are expected to recover marginally.
