According to data released by the Service Industry Survey Center of the National Bureau of Statistics and China Federation of Logistics and Purchasing on April 30, in April, the manufacturing purchasing managers index (PMI) was 47.4%, a decrease of 2.1 percentage points from the previous month; the non-manufacturing business activity index was 41.9%, a decrease of 6.5 percentage points from the previous month; the composite PMI output index was 42.7%, a decrease of 6.1 percentage points from the previous month.
Many analysts expect that with the effective control of the epidemic and the emergence of policy effects, relevant indicators are expected to improve.
Manufacturing boom declined, high-tech manufacturing was relatively stable
China’s manufacturing purchasing managers’ index (PMI) in April was the lowest since March 2020, indicating mounting downward pressure on the economy.
According to Zhao Qinghe, a senior statistician at the Service Industry Survey Center of the National Bureau of Statistics, the continuous decline in the manufacturing boom has three characteristics:
First, the decline in both production and demand has increased. This round of the epidemic has many points, wide areas, and frequent occurrences, and some enterprises have reduced production and stopped production. The production index and new orders index in April were 44.4 percent and 42.6 percent, respectively, down 5.1 and 6.2 percentage points from the previous month. At the same time, the supplier delivery time index continued to decline in April, and the finished product inventory index rose to a recent high. Many companies reported that the logistics and transportation difficulties have increased, and the production and operation of upstream and downstream related companies have been greatly affected.
Second, the price index fluctuated at a high level. The purchase price index and ex-factory price index of major raw materials were 64.2% and 54.4%, respectively, 1.9 and 2.3 percentage points lower than the previous month, and continued to be at a relatively high level recently. From the perspective of the industry, petroleum coal and other fuel processing, ferrous metal smelting and rolling processing,non-ferrous metalsThe purchase price index and ex-factory price index of major raw materials in upstream industries such as smelting and calendering exceeded 70.0% and 60.0% respectively. The raw material procurement and product sales prices of related industries continued to run at high levels, and the cost pressure in the middle and downstream industries continued to increase.
Third, the operation of some industries is relatively stable. Although the prosperity level of the manufacturing industry continues to decline, there are still some industries that are operating generally stable. Among them, agricultural and sideline food processing, food and beverage refined tea, non-metallic mineral products, railway, ship, aerospace equipment and other industries that guarantee basic people’s livelihood have high PMIs. At the critical point, and the production and operation activity expectation index is above 55.0%, which is a relatively high prosperity range.
“From the perspective of changes in sub-indices and industry PMIs, the impact of short-term factors such as the spread of the domestic epidemic and international geopolitical conflicts is still ongoing, which has a greater impact on logistics and employment, and the prices of raw materials continue to rise, and the triple pressure on the manufacturing industry is increasing. However, the high-tech manufacturing industry and consumer goods manufacturing industry are relatively stable, and the stability of small and medium-sized enterprises has been consolidated.” said Wen Tao, an expert at the China Logistics Information Center.
The boom in the service industry fell, and the construction industry continued to expand
In April, the non-manufacturing business activity index was 41.9%, 6.5 percentage points lower than the previous month, and the overall non-manufacturing business activity continued to slow down.
On the one hand, the economic level of the service industry has fallen sharply. 19 of the 21 industries surveyed by the National Bureau of Statistics are in the contraction range, among which the business activity indices of contact-aggregated industries such as air transport, accommodation, catering, ecological protection and public facility management are still in the low contraction range; wholesale, postal, financial Other industries fell to the contraction range, and the total business volume changed from rising to falling. At the same time, the business activity index of telecommunications, radio, television and satellite transmission services, Internet software and information technology services continued to be in the expansion range, ensuring the stable and orderly operation of the economy and society.
On the other hand, the construction industry kept expanding. The business activity index of the construction industry was 52.7 percent, down 5.4 percentage points from the previous month and still in the expansion range. Among them, the business activity index of civil engineering and construction industry was 61.0%, which was at a high level of prosperity for two consecutive months, and the new order index was 52.3%, continuing the trend of expansion. This shows that with the moderately advanced construction of some major infrastructures, the civil engineering construction industry has maintained a relatively fast construction progress, which has played a certain supporting role in economic and social recovery and development.
Zhang Liqun, a researcher at the Macroeconomic Research Department of the Development Research Center of the State Council, said in an interview with this reporter that the manufacturing PMI and non-manufacturing business activity index fell below the line of prosperity and decline in April, indicating that the impact of the epidemic on economic growth has increased, and the pressure cannot be underestimate.
“Under the conditions of the epidemic, contact and gathering activities such as transportation and cultural tourism have been reduced, which will have a certain impact on related industries. At present, we must promptly improve a package of measures for epidemic prevention and control and stable growth, and work together to find the best solution and eliminate the epidemic as soon as possible. The impact on economic and social development.” Zhang Liqun said.
The economic fundamentals have not changed for a long time
In the face of downward pressure, the role of growth stabilization policies is highly anticipated.
Zhao Chenxin, secretary-general of the National Development and Reform Commission, said that recently, due to the impact of the epidemic, the triple pressure of demand contraction, supply shock, and weakening expectations has become more prominent, and new downward pressure has further increased. However, this impact is phased and temporary.
Zhao Chenxin said that this year’s macro policy efforts are appropriately advanced, the new combined tax and fee support policy has been accelerated, and the overall financing cost of enterprises has been stable with some declines, and the combined force of stable growth is accelerating. At the same time, the cumulative effect of reforms in key areas continued to emerge, further stimulating the endogenous dynamism of economic development. In the next step, relevant departments will increase bailout guarantees in response to outstanding difficulties, focus on opening up blocking points in the industrial chain and supply chain, promoting the stable operation and quality upgrading of the industrial economy, and striving to achieve a stable continuity in the first and second quarters.
In Zhang Liqun’s view, despite the pressure, it should be seen that the fundamentals of China’s long-term economic growth have not changed, and the trend of sustained economic recovery has not changed. “Since the outbreak of the new crown pneumonia epidemic, my country’s scientific and precise prevention and control capabilities have been continuously summarized and improved with the changes in the characteristics of the epidemic, and a set of effective and practical prevention and control measures are being formed to provide better guarantee for maintaining normal economic and social activities. At the same time, since the beginning of this year, various regions and departments have launched policies that are conducive to economic stability, and the implementation and actual effects of the policies have been further increased.” He said.
Industry insiders generally believe that after entering May, with the support of the policy of stabilizing transportation and logistics, the production of enterprises is expected to quickly return to normal levels; with the support of the policy of fully expanding domestic demand, the orders of enterprises are expected to recover and rebound. In the future, with the detailed implementation of the policy of stabilizing growth, relevant indicators will gradually rebound.
(Article source: People’s Daily Overseas Edition)