The Manufacturing PMI in August Stayed in the Positive Range

SHANGHAI, Aug 31 (SMM) - The expansion of the manufacturing industry weakened in August. Among the 21 industries surveyed, 10 industries have PMIs in the positive range, down 3 industries from the previous month. Main features of this month are as follows:

Stable production activities. The production index stood at 50.9%, a decline of 0.1 percentage point on the month, indicating that production of manufacturing stabilised. The production index of agricultural and non-staple food processing, papermaking and printing, cultural, educational, sports and entertainment products, railway, ship, aerospace equipment and other industries are above 55.0%; petroleum, coal and other fuel processing, ferrous metals smelting and rolling processing as well as automobile was below the critical point.

Market demand weakened. The new order index stood at 49.6%, down 1.3% on the month. The new order index in high energy-consuming industries dropped significantly in August. The new order index of petroleum, coal and other fuel processing, chemical fiber and rubber and plastic products has been below the critical point for three consecutive months. In addition, some surveyed companies suggested that the supply of raw materials and product delivery was not smooth and the production cycle was prolonged due to the Covid-19 pandemic and floods. Meanwhile, the new order index in food and beverage refined tea, medicine and special equipment are in the positive range, and is higher than the level of July and 2020.

Price index trended lower. The purchase price index and ex-factory price index of major raw materials stood at 61.3% and 53.4%, respectively, 1.6 and 0.4 percentage point lower than July, and the difference between the two price indices narrowed for three consecutive months, down from 12.2 percentage points in May to 7.9 percentage points. From the perspective of the purchase price index of major raw materials, the 21 industries surveyed are all above the critical point.  The index of petroleum, coal and other fuel processing, ferrous metal smelting and rolling processing have declined sharply, but textiles, chemical raw materials and chemical products, non-metallic mineral products are still higher than 65.0%, and procurement costs of related companies are still relatively high. On the ex-factory price index side, the decline of petroleum, coal and other fuel processing, chemical fiber, rubber and plastic products all fell by 12% or more, and fell below the critical point for the first time since May.

The PMI for large and medium-sized enterprises is in the positive range. The PMI for large and medium-sized enterprises were 50.3% and 51.2%, respectively, above the critical point for 6 consecutive months. The PMI for small enterprises was 48.2%, which was below the critical point for four consecutive months. Companies held a bullish outlook on markets. The index of production and operation activities is expected to be 57.5%. The 21 industries surveyed, except for the textile, ferrous metal smelting and rolling processing industries, are above the critical point. Some companies said that their production returned to normal levels as the pandemic and floods faded away, and held an optimistic outlook.