冯氏集团-PMI中国制造业季刊（英文）-2020.10-20页_1mb

PMI Quarterly on China Manufacturing Summary

Core Content

The PMI Quarterly on China Manufacturing report highlights the strong recovery of China's manufacturing sector and broader economic activity in the third quarter of 2020 (3Q20). The report also provides policy outlook and forecasts for the fourth quarter (4Q20), emphasizing the role of stimulus policies, external demand, and price trends in shaping the recovery.

Main Points

• PMI Performance in 3Q20:

  • The headline PMI rose to 51.5 in September 2020, indicating continued strong expansion in the manufacturing sector.
  • The output index remained high, fluctuating between 53.5 and 54.0, reflecting robust production activity.
  • New orders increased significantly, rising from 51.7 in July to 52.8 in September, showing a faster recovery in overall market demand.
  • New export orders rebounded to 50.8 in September, returning to the expansionary zone for the first time since December 2019.
  • Input prices rose sharply, reaching 58.5 in September, increasing cost pressures on manufacturers.
  • Ex-factory prices also increased, staying above 52.0, indicating manufacturers are passing on higher input costs.
  • Employment remained stable, with the employment index hovering around 49.5, suggesting steady employment conditions.

• Recovery by Enterprise Size:

  • Large enterprises showed the strongest recovery, with PMI rising to 52.5 in September.
  • Medium enterprises continued to recover but at a slower pace, with PMI at 50.7 in September.
  • Small enterprises returned to expansion in September, with PMI at 50.1, after three months of contraction.

• Policy Outlook:

  • The central government is expected to fully implement existing stimulus policies to stabilize economic growth.
  • A more proactive fiscal policy and flexible monetary policy are anticipated to support major projects and M2 growth.
  • These policies aim to alleviate downward pressure and promote continued recovery.

• 4Q20 Forecasts:

  • The headline PMI is expected to stay above 50, fluctuating within 51.0 to 51.5.
  • Real GDP growth is projected to rise to 6.0% yoy.
  • VAIO growth is forecasted to reach 6.6% yoy.
  • Exports will grow at a single-digit rate in 4Q20, driven by improved external demand.
  • Purchaser price index and PPI are expected to show further improvement in year-on-year growth.

Key Information

• The PMI is a composite index that reflects the overall health of the manufacturing sector, with an index above 50 indicating expansion and below 50 indicating contraction.
• The PMI is based on data from 3,000 manufacturing enterprises across 31 industries in four regions of China (Eastern, Northeastern, Central, and Western).
• The survey methodology uses Probability Proportional to Size Sampling (PPS), ensuring representation based on GDP contribution and geographical distribution.
• The PMI is published jointly by the China Federation of Logistics & Purchasing (CFLP) and the National Bureau of Statistics (NBS), and Fung Business Intelligence drafts and disseminates the English report.
• The PMI has a strong predictive power for real GDP growth, as shown by historical correlation data.

Structure of the Report

The report is divided into several sections:

1. PMI points to strong recovery of industrial production and economic activity

   • Highlights the overall expansion and growth in manufacturing and economic activity in 3Q20.
   • Shows the PMI trend and the contributing sub-indices.

2. What the PMI tells us about the performance of enterprises of different sizes

   • Compares the recovery rates of large, medium, and small enterprises.
   • Notes that small enterprises lagged in recovery but showed marked improvement in September.

3. What the PMI tells us about manufacturing production

   • Focuses on output growth, driven by new orders rather than restocking.
   • Discusses the correlation between output and VAIO growth.

4. What the PMI tells us about the overall market demand

   • Highlights the accelerated growth in new orders and rebound in export orders.
   • Links new export orders to OECD composite leading indicator to suggest recovery in external demand.

5. What the PMI tells us about upstream and midstream prices

   • Shows the increase in input prices and the response in ex-factory prices.
   • Demonstrates the relationship between input prices and PPI.

6. What the PMI tells us about manufacturing employment

   • Notes the stabilization of employment in the manufacturing sector.
   • Highlights the dependence of employment on the export sector.

Conclusion

The PMI indicates a robust recovery in China's manufacturing and broader economy, supported by rising demand, order shifts from alternative production countries, and government stimulus measures. Despite cost pressures and external challenges, the forecast for 4Q20 remains positive, with expansion in key indicators and growth in GDP and exports expected. The report provides detailed insights into the performance of different enterprise sizes and market trends, supported by historical data and correlations.