The composite PMI for home appliances sector in April 2023 stood at 49.83, up 0.45 point on the month and 1.44 points on the year. The seasonally-adjusted composite index stood at 50.01, an increase of 4.92 points MoM and 1.38 points YoY. The index for production stood at 51.46, up 1.32 points on a monthly basis and 2.24 points on a yearly basis. The index for new orders rose 0.42 points month-on-month and 2.06 points year-on-year to 48.14. Raw material inventories averaged 30.33 days of production in April, down 0.03 day from the previous month. The number of days of raw material inventories is for reference as the survey sample may have changed.
Summary： The home appliance industry was weak in April. The production enthusiasm of enterprises was strong as the air conditioners entered the regular peak season, but new orders continued to weaken month-on-month, mainly reflected in poor domestic orders. Although the real estate performance has picked up, there has been no signs of a significant improvement in the home appliance industry. In addition, most home appliance dealers arrange sales promotions to May and June, resulting in poor orders in April. In response, home appliance producers mainly purchased raw materials as required despite the small decline in raw material prices.
Investigation:
1. A medium-sized home appliance company in east China: Although steel prices fell sharply, we did not restock inventory in large quantities due to only modest declines in spot prices. The exports of home appliances to North America are decreasing, while those to the Middle East and Southeast Asia have increased. Profits of exports were poor, which may be related to our lack of diversified products. We will turn to develop port trade in the future. The export volume in April outperformed that in March and will grow further in May. Despite higher sales volume, the profit was poor. Domestic sales and production shrank rapidly. Overall, exports have increased but domestic trade has declined.
2. A medium-sized home appliance company in east China: Orders in April improved slightly from March, with orders for home appliances such as refrigerators, washing machines, and microwave ovens all improving to a certain extent. The exports also rose. We are optimistic about the next three months considering the peak season in summer and sales promotions in May and June. Now we mainly purchase based on orders.
3. A large home appliance company in south China: Overall orders have declined, and we will purchase as needed in the next few months given uncertainties over the overseas markets.
4. A medium-sized home appliance company in south-west China: Orders in April decreased from the previous month, most of which were domestic sales. Production remained unchanged compared to the same period last year. Export-oriented companies are expected to have performed well. Real estate industry is better than last year, but this failed to help improve the weak demand for home appliances.
