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China’s Manufacturing PMI and Non-manufacturing BAI Operate Stably in June 2018

Submit Time:31-07-2018 | Zoom In | Zoom Out

Author: | Source:National Bureau of Statistics

Abstract:

On June 30, 2018, the Service Survey Center of National Bureau of Statistics and China Federation of Logistics & Purchasing jointly released the Purchasing Managers Index (PMI) of China. The senior statistician Zhao Qinghe from the Service Survey Center of National Bureau of Statistics has interpreted the PMI.  

I. The manufacturing PMI has stayed within the expansion internal.  

Since the beginning of this year, the manufacturing PMI has always remained above 50.0%--the threshold of the prosperity interval. The average value for the first half of the year stood at 51.3%. The manufacturing PMI this June was 51.5%, down 0.4 percentage point over last month but still 0.2 percentage point higher than the average of the first half of the year. This indicates that the manufacturing industry maintains an expanding trend overall. Below are major highlights displayed this month. First, the manufacturing industry holds the overall upward fundamentals. Among the 21 surveyed sectors, 15 saw their PMI operating within the expansion interval. Of these, the pharmaceutical manufacturing, special equipment manufacturing, computer, telecommunications and electronic equipment, and special instrumentation managed to maintain their PMI above 54.0%--the threshold of high prosperity interval, and kept growing fast. Second, both production and demand expand stably on the whole. The production index and the new order index stood at 53.6% and 53.2%, respectively, down 0.5 and 0.6 percentage point over last month but still 0.6 and 0.4 percentage point over the average of the first half of the year. This means the market supply and demand keep expanding continuously. Third, prosperity of import and export falls slightly after rise. The new order index was 49.8%, a decrease of 1.4 percentage point from prior month. The import index registered 50.0%, down 0.9 percentage point over last month. This manufacturing industry witnessed its export and import slowed down somewhat on the whole. Fourth, the price index continued to climb. The purchasing price index of major raw materials went up by 1.0 percentage point over last month to 57.7%. Its increase has continued for two consecutive months. The producer price index (PPI) grew by 0.1 percentage point over last month to 53.3%, the highest level of the year. Of it, the ferrous metal smelting and rolling industry saw its PPI and purchasing price index of major raw materials both exceeding 70.0%, growing at a faster pace.  

From the perspective of company size, the PMI of large enterprises reported 52.9%, down 0.2 percentage point over last month and the second highest level since the beginning of the year, which served as the primary backbone for the manufacturing industry’s continuously stable expansion; the PMI of medium enterprises stood at 49.9%, down 1.1 percentage point over last month; and the PMI of small enterprises went up by 0.2 percentage point over last month to 49.8%.  

II. The non-manufacturing business activity index (BAI) continues to go up.  

In June, the non-manufacturing BAI stood at 55.0%, up 0.1 percentage point over last month and 0.2 percentage point higher than the average of the first half of the year. This has been the fourth straight month for the index to rise stably. It indicates that the non-manufacturing industries overall maintain a momentum for stably improved development.  

The service sector operates within the relatively high prosperity interval. The service BAI registered 54.0%, on par with that in last month and 0.1 percentage point higher than the average of the first half of the year, signaling that the sector continued to maintain a momentum of fairly fast growth. In terms of industries, railway transportation, aviation transportation, telecom, banking, and other industries all saw their BAI above 60.0%--the threshold of high prosperity interval, and realized fast development. For sectors of road transportation, securities, resident service and other sectors, the BAI was below the threshold level, which indicated that the total business volume fell somewhat after rise. Analyzed by the market expectation, the expected BAI stood at 60.3%, on par with that in last month. All the surveyed sectors generated an expected BAI within the prosperity interval, which indicated that an optimistic market expectation was prevailing across the service sector.  

The construction industry gathers its pace in expansion. Since the beginning of this year, the industry has maintained fast growth. Its BAI this month reached the hike of the year, 0.7 percentage point higher than the average of the first half of the year. Of it, the property construction BAI went up for four consecutive months to 68.0%, a fairly high level. In terms of price, driven by the intensified market activeness, the construction industry saw its input price index and sales price index increasing by 2.3 percentage points and 1.6 percentage point over last month to 61.7% and 54.4%, respectively, both the highest level of the year.  

III. The comprehensive PMI output index expands steadily.  

In June, the comprehensive PMI output index was 54.4%, 0.2 percentage point lower than that in last month but still 0.3 percentage point higher than the average of the first half of the year. This index still stayed within the comparatively high expansion interval. It indicated that the Chinese enterprises overall maintained a momentum of stably fast expansion in the current phase. Of it, the manufacturing output index and the non-manufacturing BAI, as two components of the comprehensive PMI output index, registered 53.6% and 55.0%, respectively. The first index went down and the second one went up compared with last month.  


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