Orders for manufacturing sector continued to grow, with infrastructure supporting the construction industry

The PMI of steel downstream sectors in May 2024 was 50.09, down 0.08 points MoM and flat YoY. The seasonally-adjusted composite index came in at 48.7, up 0.35 points MoM and 0.23 points YoY.

Overall, the prosperity of downstream steel industries remained in the expansion territory in May, with manufacturing production continuing to accelerate. New orders were generally optimistic, although there were signs of weakening in home appliance orders. In the construction sector, infrastructure industry stabilized but were mostly ongoing projects. The index for production stood at 50.28, down 0.72 points MoM and up 0.21 points YoY. The new orders index was 50.07, up 0.39 points MoM and down 0.22 points YoY.

Data: In May 2024, the PMI for the construction sector was 49.43, down 0.89 points MoM and 0.93 points YoY. After seasonal adjustment, the composite index was 47.87, down 0.09 points MoM and 0.55 points YoY. Summary: In May, the construction industry's prosperity weakened, and the pace of construction slowed down. Some projects were affected by rainy weather, and some enterprises reported that local projects were halted due to inspections by environmental supervision teams. New projects also decreased MoM. Commercial housing projects still showed no improvement, while public buildings such as schools and affordable housing remained the main projects in the industry. The industry's downturn led to weak demand for rebar, and downstream procurement decreased MoM. Some enterprises reported an improvement of capital strains, mainly involving large-scale national projects.

Data: In May, the PMI for the machinery sector was 50.90, up 1.72 MoM and 1.59 YoY. Seasonally adjusted, the composite index was 49.69, up 0.81 MoM and 1.71 YoY. Summary: In May, the machinery sector rebounded, with an increase in the operating rate of companies and a MoM growth in new orders. Specifically, the construction machinery sector did not show significant improvement, with a sluggish domestic market but resilient exports. Agricultural machinery orders slightly dropped MoM, but the sector remained in its peak season. General machinery performed strongly, with continuous growth in new energy equipment orders. In May, the raw material procurement volume of companies increased MoM, and the purchase price index rose slightly MoM.

Data: In May 2024, the PMI for the automobile sector was 51.09, up 0.92 point MoM and 0.49 point YoY. Seasonally-adjusted, the composite index was 50.23, up 0.41 point MoM and 0.62 point YoY. Summary: In May, the automobile industry maintained a high level of prosperity, despite the off-season. The production pace of enterprises accelerated, and orders increased MoM. For passenger cars, the trade-in policies were gradually implemented across various regions and the auto shows and NEVs promotion activities in rural areas stimulated the end-user demand. Although the overall performance of commercial vehicles was relatively flat in May, exports performed well, and some companies remained optimistic about future export prospects. In terms of raw materials, although the purchase price of raw materials fell in May, car companies still restocked as needed.

Data: In May 2024, the PMI for the shipbuilding industry was 50.21, down 0.06 point MoM and up 0.02 point YoY. Seasonally-adjusted, the composite index was 50.02, up 0.77 point MoM and up 0.22 point YoY. Summary: Against the backdrop of continued industry prosperity, shipbuilding companies maintained high production enthusiasm and operating rates in May. Orders saw a slight MoM increase, although repair orders showed a downward trend. New orders were mainly for bulk carriers and LNG vessels. Additionally, new ship deliveries also increased MoM, and the share in international markets continued to rise. In May, prices for shipbuilding steel such as medium and thick plates saw a slight increase, with shipbuilding companies primarily restocking as needed without holding large inventories.

Data: In May, the PMI for the home appliance industry was 50.20, down 0.41 points MoM and 0.29 points YoY. Seasonally adjusted, the comprehensive index was 49.78, down 0.76 points MoM and 0.29 points YoY. Summary: In May, the home appliance industry remained prosperous, with an accelerated production pace, but new orders continued to decline MoM. Specifically, some regions introduced policies such as the trade-in policy to stimulate consumption, which coupled with home appliance promotions, led to a slight rebound in domestic demand. However, the rise was weak, and some companies reported the mediocre impact of policies, with many end-users taking a wait-and-see stance. Overseas orders weakened due to the off-season. Rising costs led to delays in export shipments and extended delivery times. Raw material side, as prices slightly increased in May, companies mainly purchased as needed, with procurement volumes increasing along with the accelerated production.

Data: In May 2024, the PMI for the transport infrastructure industry was 50.53, down 0.45 points MoM, up 0.40 points YoY. Seasonally-adjusted, the composite index was 49.30, up 0.57 points MoM, up 0.62 points YoY. Summary: In May, the overall construction progress of transport infrastructure enterprises remained stable. Some projects experienced a slowdown in construction pace due to the rainy season. There were fewer new projects started in May, with most enterprises focusing on existing projects. New projects saw a MoM increase, mainly in highways and railways. According to enterprise feedback, current government funding support has a minimal impact on new projects, with most funds being allocated to old projects. The issue of tight funds among enterprises remains common. In terms of raw materials, the procurement volume of enterprises saw a slight increase in May, but the willingness to stockpile remains low.