China’s overall economic recovery has accelerated

· by · in

International Business News  –  A few days ago, data released by the National Bureau of Statistics showed that in June, China’s manufacturing purchasing managers’ index (PMI), non-manufacturing business activity index and composite PMI output index were 50.2%, 54.7% and 54.1%, higher than the previous month 0.6, 6.9 and 5.7 percentage points， all rose to the expansion zone. Zhao Qinghe, a senior statistician at the Service Industry Survey Center of the National Bureau of Statistics, believes that as the domestic epidemic prevention and control situation continues to improve, and the implementation of a package of policies and measures to stabilize the economy is accelerated, the overall recovery of China’s economy has accelerated.

Manufacturing PMI was 50.2% in June

In June, the manufacturing PMI rebounded to 50.2%, returning to expansion territory after three consecutive months of contraction.

In terms of enterprise scale, the PMI of large enterprises was 50.2%, which was higher than the critical point for 2 consecutive months, continuing the momentum of recovery expansion; the PMI of medium-sized enterprises was 51.3%, 1.9 percentage points higher than the previous month, and rose to the expansion range. Production activity has accelerated, the PMI of small enterprises was 48.6%, 1.9 percentage points higher than the previous month, and the prosperity level has rebounded.

In terms of sub-indices, among the five sub-indices that make up the manufacturing PMI, the production index, the new order index and the supplier delivery time index are all higher than the critical point. Among them, the production index was 52.8%, an increase of 3.1 percentage points from the previous month, and returned to above the critical point, indicating that the recovery of manufacturing production has accelerated. The new orders index was 50.4%, up 2.2 percentage points from the previous month, indicating that the manufacturing market demand has improved. The supplier delivery time index was 51.3%, an increase of 7.2 percentage points from the previous month, indicating that the delivery time of manufacturing raw material suppliers was significantly faster than the previous month.

Zhao Qinghe analyzed that the purchasing managers index returned to the expansion range in June, reflecting the obvious positive changes in the production and operation conditions of enterprises compared with May.

“Although the manufacturing industry continued to recover this month, 49.3% of companies still reported insufficient orders, and weak market demand is still the main problem facing the manufacturing industry. At the same time, the ex-factory price index fell to 46.3%, 2 consecutive months in contraction range, the profit space of some companies has been squeezed to a certain extent, and the operating pressure is relatively large.” Zhao Qinghe said that there are still many uncertain factors in the current domestic and foreign economic environment, and it is necessary to further refine and implement a package of policy measures to stabilize the economy, and actively expand effective demand. Consolidate the momentum of economic recovery and development.

Manufacturing boom continues to expand

In June, among the 21 manufacturing industries surveyed, 13 PMIs were in the expansion range, and the manufacturing boom continued to expand, and positive factors continued to accumulate.

Zhao Qinghe analyzed that with the continuous progress of resumption of work and production, the production and demand that was suppressed in the early stage of the company will be released faster. From the perspective of the industry, the production index and new order index of automobiles, general equipment, special equipment, computer communication electronic equipment and other industries are both higher than 54.0%, and the recovery of production and demand is faster than that of the manufacturing industry as a whole. At the same time, policies and measures such as logistics guarantee and smooth flow have been effective, and the delivery time of suppliers has been significantly accelerated compared with the previous month, effectively guaranteeing the production and operation of enterprises.

The recovery of high-tech and equipment manufacturing industries accelerated. The PMIs of high-tech manufacturing and equipment manufacturing were 52.8% and 52.2%, respectively, 2.3 and 3.3 percentage points higher than the previous month. The PMI of the consumer goods industry was 50.9%, 0.7 percentage points higher than the previous month, and the consumer goods industry continued to recover. The PMI of high energy-consuming industries was 48.3%, which was 1.7 and 1.9 percentage points lower than that of the previous month and the overall manufacturing industry, and the overall level of prosperity was low.

Business expectations have improved. The production and operation activity expectation index was 55.2%, 1.3 percentage points higher than the previous month, and rose to a nearly 3-month high, and business confidence continued to recover. Judging from the industry situation, the production and operation activity expectation index of food, alcoholic beverages, refined tea, automobiles, railways, ships, aerospace equipment and other industries is higher than 60.0%, and enterprises have positive expectations for the recent market development.

The service industry continues to recover

In June, the non-manufacturing business activity index rebounded sharply into expansionary territory. “The non-manufacturing business activity index was 54.7%, 6.9 percentage points higher than the previous month, and it rebounded significantly for two consecutive months.” Zhao Qinghe said.

The service sector has returned to expansion territory. Zhao Qinghe analyzed that the domestic epidemic situation was generally stable in June, various policies and measures to help enterprises were gradually implemented, and the service industry continued to recover. “The business activity index rose from a low base level in April and May to 54.3%, 7.2 percentage points higher than the previous month, returning to the expansion range, and the operating conditions of service industry companies have improved compared with May.”

Among the 21 industries surveyed, the number of business activity indices in the expansion range increased from 6 in the previous month to 19, and the prosperity of the service industry expanded significantly. Among them, the business activity index of the industries seriously affected by the epidemic in the early stage all rebounded, and the railway transportation, air transportation and other industries were higher than 65.0%, and the total business volume increased month-on-month for two consecutive months. “From the perspective of market demand and expectations, the new orders index and business activity expectation index were 53.7% and 61.0%, 10.0 and 5.8 percentage points higher than the previous month, indicating that with the weakening of the impact of the epidemic, the market demand for the service industry has picked up, and enterprises confidence is gradually restored.” Zhao Qinghe said.

At the same time, the construction industry rose to a higher economic range. The business activity index of the construction industry was 56.6%, 4.4 percentage points higher than the previous month, indicating that the prosperity of the construction industry has rebounded; the supplier delivery time index was 50.5%, 8.8 percentage points higher than the previous month, indicating that the unimpeded transportation and logistics policy has achieved actual results . From the perspective of market expectations, the business activity expectation index rebounded by 5.2 percentage points to 63.1%, indicating that companies are more optimistic about the recent industry development prospects.

In June, the composite PMI output index was 54.1%, 5.7 percentage points higher than the previous month; manufacturing production and non-manufacturing business activity, which make up the composite PMI output index, came in at 52.8 per cent and 54.7 per cent respectively. “The composite PMI output index continued to pick up, indicating that the production and operation of Chinese enterprises generally showed a recovery expansion.” Zhao Qinghe said.