National Bureau of Statistics: China's manufacturing PMI fell for the fourth month in a row, at 50.4%

I. the Operation of Purchasing Manager Index in China's Manufacturing Industry

In July, China's manufacturing purchasing managers' index ((PMI)) was 50.4 per cent, down from 0.5 per cent last month and remained above the tipping point. Overall, the manufacturing sector continued to expand, but at a slower pace.

In terms of enterprise size, the PMI of large enterprises was 51.7 per cent, the same as the previous month and continued to be above the tipping point; the PMI of medium-sized enterprises was 50.0 per cent, down 0.8 per cent from the previous month, at the tipping point; and the PMI of small enterprises was 47.8 per cent, down 1.3 percentage points from the previous month and below the tipping point.

From the perspective of classification index, among the five sub-indices of manufacturing PMI, the production index and new order index are higher than the critical point, while the raw material inventory index, employee index and supplier delivery time index are lower than the critical point.

The production index was 51.0%, down 0.9 percentage points from last month and above the tipping point, indicating that the expansion of manufacturing production has weakened.

The new orders index was 50.9 per cent, down 0.6 percentage points from last month and above the tipping point, indicating a slowdown in demand growth in the manufacturing market.

The inventory index of raw materials was 47.7%, down 0.3 percentage points from the previous month and below the tipping point, indicating that the inventory of major raw materials in the manufacturing industry has decreased compared with the previous month.

The employment index was 49.6%, up 0.4 percentage points from the previous month, indicating that the employment mood of manufacturing enterprises continued to improve.

The supplier delivery time index was 48.9%, up 1.0 percentage points from last month, below the critical point, indicating that the delivery time of manufacturing raw material suppliers has been extended.

II. Operation of purchasing managers' index in China's non-manufacturing industry

In July, the non-manufacturing business activity index was 53.3 per cent, slightly lower than the previous month's 0.2 percentage points and continued to be above the tipping point, indicating that the non-manufacturing sector as a whole maintained steady expansion.

In terms of sectors, the business activity index of the construction industry was 57.5%, down from 2.6 percentage points last month. The service sector business activity index was 52.5%, 0.2 percentage points higher than last month. From the perspective of the industry, the business activity index of water transport, telecommunications, radio and television and satellite transmission services, capital market services and other industries is above 60.0%; the business activity index of other financial, real estate, residential services and other industries is below the critical point.

The new orders index was 49.7 per cent, up 0.1 per cent from the previous month and still below the tipping point, indicating a slightly narrowed decline in demand in the non-manufacturing market. In terms of sectors, the index of new orders in the construction industry was 50.0%, down 1.2 percentage points from the previous month, while the index of new orders in the service sector was 49.7%, up 0.3 percentage points from the previous month.

The input price index was 53.5 per cent, up 0.1 percentage points from the previous month and higher than the tipping point, indicating that the price of inputs used by non-manufacturing enterprises for business activities increased slightly compared with the previous month. In terms of sectors, the price index of inputs in the construction industry was 57.1 percent, up 5.4 percentage points from the previous month, while the price index of inputs in services was 52.8 percent, down 0.9 percentage points from the previous month.

The sales price index was 51.3 per cent, down 0.1 percentage points from the previous month and above the tipping point, indicating that the price increase in non-manufacturing sales narrowed slightly. In terms of sectors, the sales price index of the construction industry was 52.9 percent, up 0.9 percentage points from the previous month, while the sales price index of services was 51.1 percent, down 0.1 percentage points from the previous month.

The employment index was 48.2%, up 0.2 percentage points from the previous month, indicating a slight improvement in the employment climate of non-manufacturing enterprises. In terms of sectors, the employment index of the construction industry was 52.1 percent, up 1.8 percentage points from the previous month; and the employment index of the service industry was 47.5 percent, down 0.1 percentage points from the previous month.

The expected index of business activity was 60.7%, down 0.1% from the previous month, and remained in a high range of prosperity, indicating that non-manufacturing enterprises are optimistic about the development of the market. From a sub-industry point of view, the expected index of business activities in the construction industry was 64.0%, up 0.8 percentage points from the previous month, while the expected index of business activities in the service industry was 60.1%, down 0.3 percentage points from the previous month.

III. Operation of China's Comprehensive PMI output Index

In July, the composite PMI output index was 52.4%, down 0.5 percentage points from the previous month, indicating that the expansion rate of production and business activities of Chinese enterprises has slowed down.

Notes

1. Interpretation of main indicators

Purchasing Manager Index ((PMI),) is an index compiled through the statistical summary of the monthly survey results of purchasing managers of enterprises. it covers all aspects of enterprise procurement, production, circulation and other links, including manufacturing and non-manufacturing fields. it is one of the leading indexes commonly used in the world to monitor the trend of macro-economy, and has a strong forecasting and early warning function. The comprehensive PMI output index is a comprehensive index reflecting the output changes of the whole industry (manufacturing and non-manufacturing) in the PMI index system. When the PMI is higher than 50%, it reflects the overall expansion of the economy compared with the previous month; if it is below 50%, it reflects the overall contraction of the economy from the previous month.

two。 Scope of investigation

There are 31 manufacturing industries with 3000 survey samples in the National Economic Industry Classification (GB/T4754-2017) and 43 non-manufacturing industries with 4200 survey samples.

3. Investigation method

The purchasing manager survey adopts the PPS (Probability Proportional to Size) sampling method, taking the manufacturing or non-manufacturing industries as the layer, the industry sample size is distributed according to the proportion of the added value in all manufacturing or non-manufacturing added value, and the samples in the layer are extracted by probability proportional to the main business income of the enterprise.

This survey is organized and carried out by the investigation team directly under the National Bureau of Statistics and uses the national statistical network direct reporting system to conduct a monthly questionnaire survey on the purchasing managers of enterprises.

4. Calculating method

(1) the calculation method of classification index. Manufacturing purchasing manager survey index system includes production, new orders, new export orders, on-hand orders, finished goods inventory, procurement volume, imports, purchase prices of major raw materials, ex-factory prices, raw material inventory, employees, supplier distribution time, production and management activities and other 13 sub-indexes. The non-manufacturing purchasing manager survey index system includes 10 sub-indexes, such as business activities, new orders, new export orders, on-hand orders, inventory, input prices, sales prices, employees, supplier delivery time, business activity expectations and so on. The sub-index is calculated by the diffusion index, that is, the percentage of enterprises with positive answers plus half of the percentage with constant answers. As there is no composite index in the non-manufacturing industry, the business activity index is usually used to reflect the overall changes in the development of the non-manufacturing economy.

(2) the calculation method of manufacturing PMI index. The manufacturing PMI is weighted by five diffusion indices (sub-indices). The five sub-indices and their weights are determined according to the degree of their leading impact on the economy. Specifically include: new order index, weight is 30%; production index, weight is 25%; employee index, weight is 20%; supplier delivery time index, weight is 15%; raw material inventory index, weight is 10%. Among them, the supplier distribution time index is the inverse index, and the reverse operation is carried out when synthesizing the manufacturing PMI index.

(3) the calculation method of comprehensive PMI output index. The comprehensive PMI output index is formed by the weighted summation of the manufacturing production index and the non-manufacturing business activity index, and the weight is the proportion of manufacturing and non-manufacturing in GDP, respectively.

5. Seasonal adjustment

The purchasing manager survey is a monthly survey, which is affected by seasonal factors and the data fluctuates greatly. The indices released are all seasonally adjusted.