The overall level of China's economic prosperity remains stable
On August 31st, the Service Industry Survey Center of the National Bureau of Statistics and the China Federation of Logistics and Purchasing released the China Purchasing Managers Index. In August, the Purchasing Managers Index for the manufacturing industry was 49.7%, an increase of 0.4 percentage points from the previous month; The non manufacturing business activity index is 51%, a decrease of 0.5 percentage points from the previous month and still in the expansion range; The comprehensive PMI output index is 51.3%, an increase of 0.2 percentage points from the previous month, indicating that the overall level of China's economic prosperity remains stable.
Manufacturing PMI rebounds for three consecutive months
In August, out of the 21 industries surveyed, 12 showed a month on month increase in PMI, indicating further improvement in the manufacturing industry's prosperity level. "The PMI index continued to slightly increase in August, with the majority of sub indicators showing an increase, indicating that the momentum for economic recovery continues to accumulate," said Zhang Liqun, a researcher at the Development Research Center of the State Council.
Manufacturing production activities have accelerated, and market demand has improved. Wen Bin, Chief Economist of China Minsheng Bank, said that from high-frequency indicators, the operating rates of automotive tire steel tires, blast furnaces, as well as chemical industries such as methanol, PTA, and PX have all rebounded compared to the previous month. Based on the previously released profit data of industrial enterprises, the decline in enterprise profits continues to narrow due to factors such as decreased production costs and gradually recovering demand. Especially, the upstream raw material manufacturing industry and midstream equipment manufacturing industry have performed well, which helps to release production capacity.
According to Wen Tao, an expert from the China Logistics Information Center, due to the steady progress of new and old infrastructure construction in various regions, the demand for related equipment driven by post disaster reconstruction in many areas, and the upcoming traditional sales peak season in the automotive industry, the demand for the equipment manufacturing market increased rapidly in August. After the hot and rainy weather, consumer activities have returned to normal operation, and various demand expansion policies have been well implemented. The domestic consumer market demand has grown rapidly, and at the same time, foreign trade merchants have prepared goods in advance for the peak season in Europe and America, which has also driven up export orders.
Non manufacturing industries maintain an expansion trend
In August, the non manufacturing business activity index was 51%, a decrease of 0.5 percentage points from the previous month, maintaining an expansion trend. Data shows that the construction industry has warmed up, service consumption continues to be active, and social financing activities have rebounded.
The service industry continues to recover. The service industry business activity index is 50.5%, a decrease of 1 percentage point from the previous month and still above the critical point. From the perspective of the industry, summer consumption has a more significant driving effect on the growth of the service industry. The business activity index of industries such as railways, aviation, accommodation, catering, ecological protection and public facility management, and cultural, sports, and entertainment has been in a relatively high prosperity range of over 55% for two consecutive months, and the total business volume continues to grow rapidly. "After September, service consumption will continue to operate steadily and is expected to continue to provide incremental demand. Holiday consumption is expected to take over from summer consumption," said Wu Wei, an expert at the China Logistics Information Center.
Social financing activities have rebounded, and the business activity index and new order index of the financial industry have both increased compared to the previous month. Wu Wei believes that with the gradual implementation of various policies supporting the real economy, the financing demand for the real economy is expected to further increase. At the same time, the policy combination around the capital market will gradually release its effectiveness, which is conducive to boosting market confidence and activating the capital market.
Zhou Maohua, a macro researcher at the Financial Market Department of Everbright Bank, believes that as domestic economic activities return to normal, the real estate market gradually stabilizes and recovers, financial market sentiment continues to warm up, and the service industry is expected to continue to maintain a positive expansion trend, with huge development space.
In August, the business activity index of the construction industry was 53.8%, an increase of 2.6 percentage points from the previous month. Cai Jin, Vice President of the China Federation of Logistics and Purchasing, stated that after the end of the rainy season, activities in the infrastructure and home decoration industries have increased, and the business activity index and new order index of the civil engineering, construction, and building decoration industries have both increased compared to the previous month. With the accelerated issuance of special bonds, the driving effect of investment will continue to emerge.
The rebound momentum will be further consolidated
In August, the comprehensive PMI output index was 51.3%, an increase of 0.2 percentage points from the previous month, continuing to remain in the expansion range. The manufacturing production index and non manufacturing business activity index, which constitute the comprehensive PMI output index, are 51.9% and 51%, respectively. Wen Bin believes that the continued recovery of economic prosperity is related to the high willingness of residents to consume, the prominent role of infrastructure in driving growth, and the improvement of corporate confidence.
From market expectations, in terms of manufacturing, the expected index of production and operating activities is 55.6%, an increase of 0.5 percentage points from the previous month, and it has been in a relatively high prosperity range for two consecutive months. "This indicates that with the recent intensive introduction of a series of macroeconomic regulation policies and measures, the development confidence of enterprises has further strengthened," said Zhao Qinghe, senior statistician at the Service Industry Survey Center of the National Bureau of Statistics.
In terms of non manufacturing industry, the expected index of service industry business activities is 57.8%, which continues to maintain a relatively high prosperity range. Most service industry enterprises are optimistic about the future development of the industry. "The fundamental recovery and policy intensification are gradually offsetting the short-term factors that have disrupted China's economic recovery, and the unexpected data is expected to bring a more positive reaction to the market," said Pang Ming, Chief Economist and Research Director of JLL Greater China.
But the data also shows the problem of insufficient demand. The proportion of manufacturing enterprises reflecting insufficient market demand still exceeds 59%, and the constraint of demand contraction on enterprise production activities remains prominent. Zhang Liqun stated that we need to further improve the practical effect of the policy of expanding domestic demand, focus on enhancing the driving role of government investment in the overall investment of society, quickly reverse the state of insufficient demand, and fully consolidate the momentum of economic recovery.
