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Basic Trend of Industrial Recovery Unchanged

PMI Remains in the Expansion Range for the 10th Consecutive Month

Submit Time:11-09-2017 | Zoom In | Zoom Out

Author:Du Haitao | Source:People’s Daily (August 1, 2017)


On July 31, the China Federation of Logistics & Purchasing and the Service Industry Investigation Center of the National Bureau of Statistics announced that the manufacturing industry’s purchasing managers index (PMI) for July was 51.4%, 0.3 percentage points lower than the previous month. But overall, the index has dropped little and remained above 51% for ten consecutive months at a relatively high level in recent years. 

According to research follow at the Development Research Center of the State Council Zhang Liqun, the PMI for July dropped slightly but remains in the expansion range, showing the trend of China’s steady economic growth. At present, the demand in domestic and overseas markets is stable generally, the index of enterprises’ expected production and operation activities is higher, and production and operation activities remain quite active. “In light of the overall situation, the economy is still in the phase of stabilizing at the bottom, but growth tends to be more stable.” 

A survey shows that the production index, new order index and new export order index for July are 53.5%, 52.8% and 50.9% respectively, all lower than the previous month. According to analyst at the China Logistics Information Center Chen Zhongtao, the indexes fell because their current levels are already quite high so fluctuations are inevitable on the one hand and they have obvious seasonal characteristics on the other. Now the hot and rainy weather and floods in some provinces and municipalities have exerted some short-term influence on enterprises’ production and operation activities. In view of the indexes’ trends and survey of enterprises, we think basically steady economic development remains unchanged and the trend of steady improvement is still developing. 

Enterprises’ production and operation activities have not fluctuated greatly overall, and the basic trend of industrial recovery is unchanged. The production index for July dropped slightly but still remained at a high level above 53%, 1.5 percentage points higher than the same period of the previous year. Among the 21 sectors surveyed, most sectors’ indexes still remained above 50%, and only six sectors’ indexes were below 50%. 

The market demand is high, and enterprises are receiving more and more orders. In July, the new order index dropped slightly but still remained around 53%, more than two percentage points higher than the same period of the previous year. Economic development is highly coordinated. With the constant implementation of excessive capacity and inventory reduction, the relationship between market supply and demand became more balanced, supply and demand increased moderately, and both the production index and the new order index remained around 53%, the gap between the two being less than one percentage point. The industrial structure was deeply improved, and the shift from old driving forces behind growth to new ones accelerated. In July, the high-tech and equipment manufacturing sectors’ PMIs dropped but their leading positions and roles in the manufacturing industry were prominent. The PMI is more than one percentage point higher than the manufacturing industry’s overall level. 

The statistics released on July 31 also show that the non-manufacturing business activity index for July dropped 0.4 percentage points over the previous month to 54.5%. According to Vice Chairman of the China Federation of Logistics & Purchasing Cai Jin, the business activity index dropped slightly but still remained above 54%. The constant changes in market supply and demand, prices and employment show the non-manufacturing sectors’ trend of sustained rapid development is unchanged. 

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