Manufacturing PMI will rebound and stable growth policy will be enhanced

According to the Shanghai Securities News on September 2, although the PMI of manufacturing industry declined slightly in August, the PMI of equipment manufacturing industry and high-tech industry showed a trend of expansion, indicating that the new momentum maintained a steady growth. Over the same period, PMI in non-manufacturing industries rose by 0.1 percentage point to 53.8% from last month, which also laid a good foundation for stable economic growth. Liu Xuezhi, a senior researcher at the Financial Research Center of the Bank of Communications, told the Shanghai Stock Exchange newspaper that the growth rate of industrial profits in July had turned positive, and the high-frequency data of industrial production had also rebounded in August. The average daily coal consumption of the six major power generating groups showed a gradual upward trend, and the start-up rate of blast furnaces had risen. Manufacturing PMI has not improved due to recent improvements in industrial data, but is more affected by weakening demand expectations. In addition, high temperature and rainy weather affect production operations, but also to a certain extent, the prosperity of manufacturing industry. There are still many positive signals from the PMI subdivision index of manufacturing industry. For example, the index of new export orders has risen, and the prosperity of small enterprises has risen. According to the data of the National Bureau of Statistics, in August, the PMI of large enterprises was 50.4%, which was higher than the critical point for two consecutive months. This is an important support for the stable development of manufacturing industry. The PMI of small businesses was 48.6%, up 0.4 percentage points from last month. The production index is 51.3%, the first expansion since May.

Liu Xuezhi predicts that the impact of high temperature and typhoon weather will weaken after autumn, and PMI in manufacturing industry is expected to stabilize or rebound as the positive policies gradually become effective. In an interview with reporters, several analysts said that in the face of weakening demand pressure, macroeconomic policies still need to increase counter-cyclical adjustment, focusing on expanding effective domestic demand. Zhang Jun, chief economist of Morgan Stanley Huaxin Securities, pointed out that in addition to implementing the existing fiscal policy and opening up the transmission mechanism to highlight the policy effectiveness, in the second half of the year, the policy level will make greater efforts to improve fiscal policy to support more infrastructure investment expenditure and stabilize economic growth.