Manufacturing PMI returns to expansion interval every June

According to the data of the National Bureau of statistics, in November 2019, China's Manufacturing Purchasing Manager Index (PMI) was 50.2%, up 0.9 percentage points from last month. Not only did it not continue to hover at the low level as previously predicted by the market, but also stood on the 50% boom and bust line again six months later, returning to the boom zone, and setting the second highest record in the year. In addition, the non manufacturing business activity index of the current month was 54.4%, up 1.6 percentage points over the previous month; the comprehensive PMI output index was 53.7%, up 1.7 percentage points over the previous month. According to the analysis of some experts, PMI data and various sub indicators in November reflect that economic momentum has been restored, both supply and demand are improving, and enterprise expectations are also improving. From the perspective of historical data, after entering 2019, the PMI data of January to February and may to October are under 50% of the boom and bust line for a long time, and the total operation time of PMI in the boom period is significantly less. In November, PMI not only rose 0.9 percentage points over the previous month, but also ended the long-term low-level operation of data, and returned to the top of the boom and bust line.

What's the reason behind this? For this, Zhao Qinghe, Senior Statistician of the service industry investigation center of the National Bureau of statistics, explained that the data in November reflected the improvement of both sides of supply and demand. Production index and new order index were 52.6% and 51.3% respectively, up 1.8 and 1.7 percentage points on a month on month basis, both of which are the highs since the second half of the year, with new order index returning to the expansion range. In addition, import and export also improved. The new export order index and import index were 48.8% and 49.8% respectively, up 1.8 and 2.9 percentage points on a month on month basis. Among them, the index of new export orders rebounded, which was related to the increase of overseas orders at Christmas; the index of import rebounded obviously driven by domestic demand. For the causes of the return of PMI to the upper part of the boom and bust line, Zhang Deli, the macro group of lianxun Securities Research Institute, pointed out that there are three main reasons: first, the policy of stable growth of infrastructure continued to increase, such as relaxing the minimum capital ratio requirements for some infrastructure projects in November; second, under the framework of "urban implementation policy", many urban real estate regulation policies have been adjusted, and developers expect to improve; third, the policy of stable growth of infrastructure continued to increase The external demand environment has improved. The reporter of the daily economic news also noted that from the sub item data, the performance of large enterprises was significantly stronger in November, while the performance of small and medium-sized enterprises also improved, which effectively led to the rise of the overall PMI index.

According to the data released this time, from the perspective of enterprise scale, the PMI of large enterprises in November was 50.9%, 1.0 percentage points higher than that of last month, returning to the top of the boom and bust line. The PMI of medium-sized enterprises was 49.5%, 0.5% higher than that of last month; the PMI of small-sized enterprises was 49.4%, 1.5% higher than that of last month. PMI data of small and medium-sized enterprises showed a significant recovery. It is undoubtedly a good thing that the short-term economic low point may have passed and PMI will return to the boom zone after 6 months. Can this trend continue? Does the strength of the data indicate that the "turning point" of the economic downturn is coming? For this, Zhang Deli analysis said that the current data means that the short-term economic low may have passed. He pointed out that from the perspective of future trends, in 2020, as the year of "two doubles", stable growth may be the main policy line of the whole year, capital investment increase, real estate regulation and control are difficult to be tightened again, and external trade environment is eased.

Compared with this year, the intensity of consumption stimulus is expected to increase. The reporter of the daily economic news noted that some important news had been published in succession recently, which provided a solid guarantee for the next economic stabilization. For example, the executive meeting of the State Council held on November 6 this year clearly pointed out that the follow-up work of the regional comprehensive economic partnership agreement (RCEP) should be done well. It was pointed out at the meeting that RCEP will set up a good demonstration for the establishment of mutually beneficial and win-win free trade arrangements among countries at different stages of development and systems, which will also help boost market confidence, promote industrial upgrading and employment, and cope with the downward pressure of the world economy. Zhang Yansheng, chief researcher of China International Economic Exchange Center, also said that if RCEP is achieved and all goods between 16 countries achieve zero tariff, China's GDP will be boosted by 0.55% and China's total export volume will be boosted by 3.15%. However, the reporter also noted that experts said that the recovery foundation of PMI data needs to be further consolidated. Wen Tao, an expert from China Logistics Information Center, said that the PMI of manufacturing industry picked up significantly in November, indicating that the macro-economy is still on a stable and positive track, but the momentum for the recovery still needs to be strengthened.