China Manufacturing Purchasing Manager Index in July

Source: National Bureau of Statistics

The manufacturing purchasing managers' index fell to the contraction range. In July, affected by the traditional off-season production, insufficient release of market demand, and low prosperity of high energy consuming industries, the manufacturing PMI fell to 49.0%.

Some industries maintained a recovery trend. Among the 21 industries surveyed, 10 industries have PMI in the expansion range, among which the PMI of agricultural and sideline food processing, food, wine and beverage refined tea, special equipment, automobile, railway, ship, aerospace equipment and other industries is higher than 52.0%, maintaining expansion for two consecutive months, and production and demand continue to recover. The PMI of high energy consuming industries such as textile, petroleum, coal and other fuel processing, ferrous metal smelting and calendering processing continued to be in the contraction range, significantly lower than the overall level of the manufacturing industry, which was one of the main factors for the decline of PMI this month. Thanks to expansion of automobile industry, for rare earth Neodymium magnet industry some giant manufacturers’ business rises quickly.  

The price index fell significantly. Affected by the price fluctuations of international bulk commodities such as oil, coal and iron ore, the purchase price index and ex factory price index of main raw materials were 40.4% and 40.1% respectively, down 11.6 and 6.2 percentage points from the previous month. Among them, the two price indexes of ferrous metal smelting and rolling processing industry are the lowest in the survey industry, and the purchase price of raw materials and the ex factory price of products have fallen significantly. Due to the sharp fluctuation of price level, some enterprises' wait-and-see mood increased and their willingness to purchase weakened. The purchase volume index of this month was 48.9%, down 2.2 percentage points from the previous month.

The expected index of production and operation activities is in the expansion range. Recently, the internal and external environment of China's economic development has become more complex and severe. The production and operation of enterprises continue to be under pressure, and the market expectation has been affected. The expected index of production and operation activities is 52.0%, down 3.2 percentage points from the previous month, and continues to be in the expansion range. From the perspective of the industry, the expected index of production and operation activities of agricultural and sideline food processing, special equipment, automobile, railway, ship, aerospace equipment and other industries is in the higher boom range of more than 59.0%, and the industry market is expected to be generally stable; The textile industry, petroleum, coal and other fuel processing industry, ferrous metal smelting and calendering processing industry have all been in the contraction range for four consecutive months, and relevant enterprises have insufficient confidence in the development prospects of the industry. The supply and demand of the manufacturing industry fell back after the rapid release in June.

The production index and new order index were 49.8% and 48.5% respectively, down 3.0 and 1.9 percentage points from the previous month, both in the contraction range. The survey results show that the proportion of enterprises reflecting insufficient market demand has increased for four consecutive months, exceeding 50% this month. Insufficient market demand is the main difficulty facing manufacturing enterprises at present, and the foundation for the recovery of manufacturing development needs to be stabilized.