Manufacturing PMI Falls Back into Contraction Range, Everbright Securities Report Shows
In a recent research report by Everbright Securities, it has been revealed that the manufacturing Purchasing Managers’ Index (PMI) in China has fallen back into the contraction range after experiencing four consecutive months of growth. This unexpected decline comes as various indexes simultaneously cooled down, causing disappointment among market participants.
According to the report, there are two primary reasons for this setback. Firstly, October is considered the traditional off-season for manufacturing. As demand is typically released ahead of the National Day holiday, the long holiday significantly reduces the number of working days in the month. Over the past three years (2020-2022), the manufacturing PMI in October has experienced an average monthly decline of 0.5 percentage points.
Secondly, the recovery of market demand has once again slowed down. A survey conducted among businesses highlighted that 59.9% of companies reported insufficient demand, which in turn weakened their willingness to produce and purchase. This decline in demand has been accompanied by a decrease in the raw material inventory index and an increase in the finished product inventory index.
The report suggests that as seasonal factors dissipate in the coming months, the manufacturing PMI is expected to return to its upward range. It emphasizes that the decline in PMI during October is primarily influenced by seasonal factors. Additionally, with the implementation of various policies aimed at stabilizing growth and the issuance of trillions of additional government bonds to boost both market demand and corporate confidence, the PMI is expected to enter a rebound trend once again.
While Securities Times strives to provide true and accurate information, it emphasizes that the content mentioned in the article should be treated as reference material and does not constitute substantive investment advice. It also cautions readers that any operations based on this information are conducted at their own risk.
For those interested in staying updated with stock market trends, gaining insights into policy information, and seizing wealth opportunities, it is recommended to download the official APP of “Securities Times” or follow their official WeChat account for regular updates.
Disclaimer: This article is based on the mentioned research report by Everbright Securities. The information provided is for informational purposes only and should not be relied upon for making investment decisions. Please consult with a professional financial advisor before making any investment choices.