Caixin manufacturing PMI rebounded for 4 consecutive months

In October, Caixin's purchasing managers' index of China's manufacturing industry was 51.7%, up 0.3 percentage points from September, rising for four consecutive months. From the perspective of sub indexes, the new order index, new export order index and output index have rebounded. From next week, major macroeconomic data will be released in October. Institutions generally predict that in October, the growth rate of exports and consumption is expected to improve, and fixed asset investment data will continue to stabilize driven by the rebound in infrastructure investment. Data released by Caixin yesterday showed that in October, Caixin's China Manufacturing Purchasing Manager Index (PMI) was 51.7%, up 0.3 percentage points from September, rising for four consecutive months. This shows that the manufacturing industry continues to pick up, and the manufacturing industry may gradually have a stable foundation. In terms of PMI index, this number has reached a new high in 20 months. From the perspective of sub indexes, the new order index, new export order index and output index have rebounded. Among them, the new order index rose sharply in October, the highest since February 2013; foreign demand improved significantly, and the new export order index rebounded significantly above the boundary between boom and bust, the highest since March 2018. Manufacturers generally reflect that the market situation has become stronger and customer demand at home and abroad has improved.

Domestic and foreign demand improved significantly, driving manufacturers to expand production. In October, the output index has risen for four consecutive months, the highest since 2017. Meanwhile, China's manufacturing industry's optimism about the production outlook in the next 12 months has improved to a six-month high. This trend is not consistent with the performance of the official manufacturing PMI. The previous day, the National Bureau of statistics released a manufacturing PMI of 49.3% in October, down 0.5 percentage points from the previous month, the lowest level since the second quarter of this year. The trend of the two indexes deviates or is caused by different samples. The sample enterprises of Caixin PMI mostly adopt the samples of the eastern coastal areas, and most of them are export enterprises.

The rebound of PMI of new export orders of small and medium-sized enterprises caused by the export grabbing effect has played a certain role in the rebound of PMI of small and medium-sized enterprises, and affected the rebound of PMI of new orders of small and medium-sized enterprises. " Li zelei, an analyst with Galaxy futures, believes that with the weakening and disappearance of export grabbing benefits, the two indicators will tend to be unified. Zhong Zhengsheng, chief economist of moneta research, a think tank of Finance and innovation, said that China's economy will continue to repair at a relatively fast speed in October. If terminal demand, especially infrastructure construction and exports, continues to improve, the manufacturing industry will gradually have a stable foundation. From next week, major macroeconomic data will be released in October. Institutions generally predict that in October, the growth rate of exports and consumption is expected to improve, and fixed asset investment data will continue to stabilize driven by the rebound in infrastructure investment. The macro team of Shenwan Hongyuan Securities pointed out that under the joint effect of multiple positive factors, the year-on-year decline of exports in October may be narrowed, and the year-end two months are expected to slightly improve. In addition, the disturbance of automobile sales will be significantly weakened in the fourth quarter.

The previous individual tax reduction and value-added structural tax reduction have continued to promote consumption, and the consumption growth is expected to pick up to 8.3% in October. Xie Yaxuan, chief Macro Analyst of China Merchants Securities, believes that at present, the increase of counter cyclical adjustment has been reflected in the investment data. The growth rate of infrastructure investment continued to pick up in August and September. It is expected that the growth rate of infrastructure investment will continue to pick up in October, and the overall growth rate of investment will remain around 5.3%. In Xie Yaxuan's view, the effect of future counter cyclical adjustment and tax reduction policies will be reflected, and the economy will show signs of stabilizing in October. In November, it is expected that the growth rate of industry and investment will be relatively stable, consumption growth will pick up, and PPI will pick up.