May manufacturing and non-manufacturing PMI expansion accelerated

In May, China's Manufacturing Purchasing Managers Index (PMI) was 51.9%, up from 0.5% last month. Experts believe that from the main sub-index, the major indices such as supply and demand have all increased, which is significantly higher than the same period of last year. In a comprehensive view, the internal dynamics of the economy increase, the quality continues to increase, the resilience against short-term fluctuations increases, and the overall operating situation is stable –
On May 31, the National Bureau of Statistics Service Survey Center and the China Federation of Logistics and Purchasing issued the China Purchasing Manager Index. In May, the Manufacturing Purchasing Managers Index (PMI) was 51.9%, which was 0.5 percentage points higher than the previous month. The overall expansion of the manufacturing industry accelerated; the non-manufacturing business activity index was 54.9%, up 0.1 percentage point from the previous month. The overall development of the manufacturing industry continues to rise steadily.
Relevant experts indicated that the manufacturing PMI index rose slightly in May, manufacturing enterprises were more active in production and business operations, and the overall operating situation was stable; the service industry maintained a positive development and the stability of economic operation was enhanced. In general, the economy is expected to continue its steady growth in May, but it should continue to focus on the impact of rising prices of input products on the mid-stream and downstream industries.
The manufacturing PMI was the highest in May for 5 months, and the manufacturing PMI was 51.9%, 0.5 and 0.7 percentage points higher than the previous month and the same period of the previous year respectively. This is the highest point since October 2017, indicating that the pace of manufacturing expansion has accelerated The development momentum is further enhanced.
According to Zhao Qinghe, senior statistician of the Service Survey Center of the National Bureau of Statistics, in May, supply and demand of the manufacturing industry took sides and the market activity increased. The production index and new order index were 54.1% and 53.8%, respectively, higher than the previous month. Both and 0.9 percentage points rose to the year's high.
From a structural point of view, in May, equipment manufacturing and high-tech manufacturing PMI was 53.0% and 54.8%, respectively, an increase of 1.3 and 1.0 percentage points from last month, and both continued to be higher than the overall level of manufacturing. The PMI for consumer goods manufacturing industry was 52.7%, which was basically the same as last month and was stable. This shows that the pace of transformation and upgrading of the manufacturing industry has accelerated, and the supporting role of new kinetic energy continues to increase.
“The traditional industry boomed and business production improved.” Zhao Qinghe said that in May, the PMI for high energy-consuming manufacturing industry was 50.5%, returning to the expansion zone, in which the PMI for ferrous metal smelting and rolling processing industry rose to a recent high.
“Major indexes such as supply and demand have increased, which is significantly higher than the same period of last year. Overall, the economic internal dynamics have increased, the quality has continued to increase, the resilience against short-term fluctuations has increased, and the overall operating situation has been stable.” said Chen Zhongtao, an expert at the China Logistics Information Center. .
It is worth noting that the manufacturing price index has risen significantly due to the impact of rising market demand and rising international commodity prices. In May, the major raw material purchase price index and the ex-factory price index were 56.7% and 53.2%, up 3.7 and 3.0 percentage points respectively from the previous month, and 7.2 and 5.6 percentage points higher than the same period of last year.
The survey results also showed that the proportion of manufacturing companies that reflected tight funding in May was 40.1%, which rose for three consecutive months. The support of the financial service entity economy needs to be further strengthened. At the same time, the proportion of companies that reflect the high cost of raw materials and labor costs continues to exceed 40%, and the cost pressure is still one of the major issues in the production and operation of enterprises.
The non-manufacturing PMI rose continuously in May. The non-manufacturing business activity index was 54.9%, up by 0.1 and 0.4% year-on-month and year-on-year respectively. This was also the non-manufacturing PMI kept rising for three consecutive months, indicating non-manufacturing overall Continued steady development and momentum.
“The non-manufacturing business activity index rose for the third straight month and was at a high level of 54% for nine consecutive months, indicating that the stability of non-manufacturing industries continued to improve.” Wu Wei, expert in China Logistics Information Center Say.
In each individual index, the input prices, employees, and suppliers' delivery time index increased month-on-month, with an increase of 0.2-1.5 percentage points; the sales price index was flat in the same period; new orders, new export orders, and orders in hand The index of expectations for stocks, inventories, and business activities fell in a month-on-month ratio, falling by 0.1 to 0.9 percentage points.
In non-manufacturing industries, in May, the service business activity index of the service industry was 54.0%, up by 0.2 percentage points from the previous month, and was the second highest point in the year. Consumption has a more significant role in the growth of the service industry.
In terms of industry categories, the index of industrial business activities closely related to consumption, such as air transport, postal delivery, telecommunications, and Internet software, continues to be at a high level of over 60.0%, and the expansion trend is strong; the business activity index of traditional industries such as retail and accommodation is high. In the service industry as a whole. The business activity index of capital markets, resident services and other industries was below the critical point, and the total business volume declined. From the perspective of market demand, the new orders index was 50.4%, up 0.1%. It was higher than the critical point for two consecutive months and the market demand kept expanding.
Cai Jin, vice president of China Federation of Logistics and Purchasing, believes that in May, the business activity index of the service industry rose for two consecutive months, and the average value from January to May was better than the same period last year. The good development of the service industry will not only enhance the stability of economic operation, but also be more conducive to the optimization of China's economic structure and the continued release of new kinetic energy, thereby creating better basic conditions for improving the quality of economic development.
Affected by severe weather such as heavy rain and floods in some areas, the business activity index of construction industry in May was 60.1%, which was 0.5 percentage point lower than that of the previous month. However, it remained at a high expansion range of more than 60.0% for three consecutive months, and the production and operation of the construction industry continued. active. From the market expectation, the expected index of business activities is 65.1%, and it will continue to be in a high-level boom zone. Enterprises will still have stronger confidence in the future market.
Rising prices of input products are worth noting. In May, the comprehensive PMI output index was 54.6%, which was 0.5 percentage points higher than that of the previous month, indicating that the pace of overall expansion of production and business activities of Chinese enterprises has accelerated. Among them, the manufacturing production index and the non-manufacturing business activity index that make up the comprehensive PMI output index were 54.1% and 54.9%, both increased month-on-month. This month, the manufacturing production index rose more than the non-manufacturing business activity index.
From the perspective of future trends, the expectations of the production and business activities of manufacturing companies have remained relatively high, and they have risen steadily. May was 58.7%, up 0.3% from the previous month and 1.9% higher than the same period of last year. Procurement activities were relatively active and the purchase volume index reached 53%, which was 1.5 percentage points higher than the same period of last year.
Chen Zhongtao pointed out that in recent years, the country has focused on stabilizing the economic situation, advancing supply-side structural reforms, striving to stimulate market dynamism, increasing the power of economic growth, and improving the quality of economic development. Comprehensive policies have introduced a series of policies and measures, and the effects of policies have gradually emerged. The thick positive factors of operation, unstable factors and risk factors have been effectively controlled. This year, the economic operation has shown momentum of stable momentum, strong power, excellent structure and good quality.
Zhang Liqun, the macroeconomic research department of the Development Research Center of the State Council, pointed out that the slight increase in the PMI index in May is the short-term fluctuation of the index in the boom period, which has no trend significance. The increase in working days in May compared with April may be one of the reasons. Since 2017, the PMI index has been fluctuating slightly above and below the line of weakness, which may be a new feature of its operation. Overall, it is expected that the economy will continue to maintain steady growth in May.
Regarding the recent increase in the purchase price index and the ex-factory price index, Chen Zhongtao said that in May, the gap between the manufacturing purchase price index and the ex-factory price index narrowed, narrowing from 9 percent or more in 2017 to At present, about 3 percentage points reflect the coordinated development and win-win development of the upstream and downstream companies in the supply chain. However, attention should be paid to the linkage of upstream and downstream products and price increases to increase inflationary pressure.
From a non-manufacturing perspective, in May, non-manufacturing business activity expectations index was 61%, a decrease of 0.5 percentage points from the previous quarter.
“It seems that the changes in the overall index show that the current market supply and demand, employment and price growth continue to be stable, the business operating trend is positive, and the stability of non-manufacturing industries continues to improve,” said Wu Wei.
Wu Wei also pointed out that in May, the input price index rose by 1.5 percentage points to reach 54.2%, reaching a new high during the year, indicating that the increase in input prices has accelerated. The recent increase in international crude oil prices and the rise in domestic oil prices are the main reasons for the increase in input prices.
From the perspective of specific industries, the price index of input products such as the construction industry, road transport industry, and air transport industry has increased significantly, which is clearly reflected in the increase in transportation costs. From the perspective of enterprises, the share of the problem reflecting the rise in transportation costs rose to 13.4%, up 0.8 percentage points from the previous month. The rise in oil prices has also brought about a tight supply of raw materials such as energy. Corporate surveys show that the proportion of this problem is showing a month-by-month upward trend, reaching 7.16% this month, a record high for the year. Therefore, we should continue to pay attention to the rising trend of input prices and be wary of the inflationary pressures that continue to increase rapidly.

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