冯氏集团-PMI中国制造业季刊（英文）-2021.4-2021.4-20页_633kb

Summary of PMI Quarterly on China Manufacturing

Core Content

The document provides a detailed analysis of the performance of China's manufacturing sector and economy in the first quarter of 2021 (1Q21), based on the Purchasing Managers' Index (PMI). It outlines the current trends, policy outlook, and forecasts for the second quarter of 2021 (2Q21). The PMI is a key indicator of economic activity, and the report highlights its importance in gauging the health of the manufacturing industry.

Main Points

1Q21 Performance

• Robust Growth: China's manufacturing PMI rose to 51.9 in March 2021, indicating strong growth in production and economic activity despite the initial dip due to Chinese New Year holidays.
• Key Sub-Indices:
  • Output: Increased to 53.9 in March, showing rapid expansion in manufacturing production.
  • New Orders: Rose to 53.6 in March, reflecting a quick recovery in overall market demand.
  • Input Prices: Surged from 67.1 in January to 69.4 in March, indicating rising cost pressures.
  • Ex-Factory Prices: Increased to 59.8 in March, showing that manufacturers are passing on higher input costs to consumers.
  • Employment: Improved, rising from 48.1 in February to 50.1 in March, signaling a positive trend in manufacturing employment.

Policy Outlook

• The Chinese government will maintain necessary policy support for the economy.
• Fiscal Policy: Proactive and of higher quality, more effective, and more sustainable.
• Monetary Policy: Prudent and flexible, with a focus on ensuring 'reasonably sufficient' liquidity and a stable macro leverage ratio.
• These policies aim to support the continued recovery of the Chinese economy.

2Q21 Forecasts

• PMI: Expected to fluctuate within 51.0 to 52.0, remaining above the 50 threshold.
• Real GDP Growth: Projected to reach 8.0% year-on-year.
• VAIO Growth: Anticipated to exceed 8.5% year-on-year, driven by a low comparison base and improving domestic and external demand.
• Exports: Forecast to grow by over 15.0% year-on-year.
• Purchaser Price Index and PPI: Both are expected to reach their near-term peaks in 2Q21.

Key Information

Enterprise Size Performance

• Large Enterprises: Accelerated expansion, with PMI rising from 52.1 in January to 52.7 in March.
• Medium Enterprises: Resumed expansion in March, with PMI rising to 51.6.
• Small Enterprises: Returned to the expansionary zone for the first time since November 2020, with PMI at 50.4.

Manufacturing Production

• The output index rose to 53.9 in March, showing a rapid expansion in manufacturing production.
• New orders growth was the main driver of output expansion in 1Q21, rather than restocking.
• Manufacturers are expected to increase output significantly in 2Q21, supported by improving demand and a low comparison base.

Market Demand

• Overall market demand picked up, with the new orders index rising to 53.6 in March.
• New export orders also increased, from 48.8 in February to 51.2 in March.
• External demand is expected to remain strong, supported by a sustained recovery in developed economies and a low base effect, leading to a significant increase in exports.

Price Trends

• Input Prices: Continued to rise, adding cost pressures to manufacturers.
• Ex-Factory Prices: Increased due to rising input costs and a favorable sales environment.
• Purchaser Price Index and PPI: Expected to rise further in 2Q21, reaching their near-term peaks.

Employment Trends

• The employment index improved, rising from 48.1 in February to 50.1 in March.
• The strong recovery in the export sector and overall economy is expected to sustain the positive employment trend in 2Q21.

Methodology and Sources

• The PMI is compiled from data collected from 3,000 manufacturing enterprises across 31 industries in China.
• The survey uses Probability Proportional to Size Sampling (PPS), ensuring that the sample reflects the GDP contribution of each industry and geographical region.
• The PMI is a composite index, with weights assigned to key sub-indicators:
  • New Orders: 30%
  • Output: 25%
  • Employment: 20%
  • Suppliers' Delivery Time: 15%
  • Stocks of Major Inputs: 10%
• The PMI is published jointly by the China Federation of Logistics & Purchasing (CFLP) and the National Bureau of Statistics (NBS).
• Fung Business Intelligence is responsible for drafting and disseminating the English PMI report.

About the Organizations

• China Federation of Logistics & Purchasing (CFLP): Approved by the State Council, it is the logistics and purchasing industry association in China, authorized to produce industry statistics and set standards.
• Fung Business Intelligence: Based in Hong Kong, it provides global market data and analysis on sourcing, supply chains, distribution, retail, and technology. It serves businesses, scholars, and governments with reports and publications.
• Fung Group: A multinational corporation with over 30,000 employees in 40 economies. It includes both listed and private entities, with a long history in export trading and global supply chain management.

Challenges and Outlook

• Challenges: Chinese manufacturers face rising input costs, fragile external demand due to the pandemic, ongoing trade tensions with the US, and the government's push for carbon emission reductions.
• Outlook: The manufacturing sector is expected to continue its expansion in 2Q21, supported by policy support, improving demand, and a low base effect. The PMI is anticipated to remain in the expansionary zone, and employment and exports are expected to grow robustly.