China's PMI Decreased in April National Bureau of Statistics of China　2013-05-02 16:35:49 Department of Service Statistics of NBS

China Federation of Logistics and Purchases (CFLP)

In April, China's manufacturing purchasing managers index (PMI) was 50.6 percent, down by 0.3 percentage point month-on-month.

In view of the sizes of enterprises, the PMI of large-sized enterprises was 51.0 percent, down by 0.4 percentage point month-on-month; that of medium-sized enterprises was 50.7 percent, up by 0.4 percentage point month-on-month; that of small-sized enterprises was 47.6 percent, down by 1.7 percentage points month-on-month.

In term of different areas, the PMI of eastern region was 51.3 percent, 0.7 percentage point higher than that of national level, and significantly better than the other regions; that of western region was 50.1, 0.5 percentage point lower than that of national level; that of central region and north-eastern region were both 49.6 percent, 1.0 percentage point lower than that of national level, and decreased below the threshold.

In April, among the five sub-indices composing PMI, four sub-indices decreased, one sub-index kept at the same level.

Production index was above the threshold, which was 52.6 percent, slightly decreased 0.1 percentage point month-on-month, which indicating that manufacturing production kept expanding, while the growth slightly slowed down. In view of different industries, the production indices of 13 industries including manufacture of electrical machinery and equipment, manufacture of textile, manufacture of non-metallic mineral products, manufacture of chemical fibers, manufacture of rubber and plastics products etc. were above the threshold, and the production increased. The production index of manufacture and processing of non-ferrous metals stayed at the threshold, and the production changed little compared with the previous month. The production indices of 7 industries including processing of petroleum and coking, processing of food from agricultural products, manufacture and processing of ferrous metals, manufacture of food, wines, beverage and refined tea etc. were below the threshold, and the production decreased.

Production index was 51.7 percent, decreased 0.6 percentage point month-on-month, and positioned above the threshold for 7 consecutive months, which indicating that the manufacturing products order quantity continued to grow, but the amount of increase narrowed. In view of different industries, the production indices of 15 industries including manufacture of electrical machinery and equipment, manufacture of non-metallic mineral products, manufacture of  textile, manufacture of chemical fibers, manufacture of rubber and plastics products etc. were above the threshold, and the market demand increased; the new orders indices of 6 industries including processing of petroleum and coking, processing of food from agricultural products, manufacture and processing of ferrous metals etc. were below the threshold, and the market demand dropped back. The survey results showed that foreign new orders index which reflects the situation of foreign trade of manufacturing was 48.6 percent, decreased 2.3 percentage points month-on-month, and dropped below the threshold, which indicating that the amount of exports of manufactured goods turned to decrease from increase; the import index was 48.7 percent, decreased 0.2 percentage point month-on-month, and still stayed below the threshold, which indicating that the imports of raw materials used in the production of the manufacturing continued to decrease.

Main raw materials inventory index was 47.5 percent, remained at the same level over last month, and stayed below the threshold for three consecutive months, which indicating that the raw materials inventory continued to decrease. In view of different industries, the main raw materials inventory indices of 4 industries including manufacture of fabricated metal products, manufacture of electrical machinery and equipment, manufacture of computer, communication equipment, other electronic equipment, measuring instrument and meter, manufacture of food, wines, beverage and refined tea were above the threshold, and the main raw materials inventory increased; the index of processing of timbers and manufacture of furniture stayed at the threshold, and the main raw materials inventory kept at the same level over last month; the indices of 16 industries including manufacture and processing of ferrous metals, manufacture of chemical raw material and chemical products, manufacture and processing of non-ferrous metals, manufacture of cigarettes and tobacco etc. were below the threshold, and the main raw materials inventory decreased.

Employed person index was 49.0 percent, decreased 0.8 percentage point month-on-month. In view of different industries, the employed person indices of only 4 industries including manufacture of electrical machinery and equipment, manufacture of computer, communication equipment, other electronic equipment, measuring instrument and meter, manufacture of chemical fibers, manufacture of rubber and plastics products, manufacture of  textile, were above the threshold, and the employment increased. The employed person indices of 17 industries including manufacture of railway locomotives, building of ships and boats, manufacture of air and spacecrafts and other transportation equipments, manufacture of cigarettes and tobacco, processing of food from agricultural products, manufacture of chemical raw material and chemical products etc. were below the threshold, and the employment decreased in varying degrees.

Supplier delivery time index was 50.8 percent, 0.3 percentage points lower month-on-month, and continued to stay above the threshold, which indicated that the manufacturing supplier delivery time accelerated over last month.

Main raw material purchase price index was 40.1 percent, a sharp decrease of 10.5 percentage points month-on-month, and dropped below the threshold, which indicating that the raw material purchase price of manufacturing turned to decrease from increase, and the decline was significant. Among 21 industries, only the main raw material purchase price index of manufacture of food, wines, beverage and refined tea were above the threshold, and the purchase cost of enterprises increased; the main raw material purchase price indices of the other 20 industries were below the threshold, of which the raw material purchase price of processing of petroleum and coking, manufacture and processing of ferrous metals, manufacture of chemical fibers, manufacture of rubber and plastics products, manufacture of electrical machinery and equipment, manufacture and processing of non-ferrous metals experienced a larger decline.

Production and business activities expectation index was 59.3 percent, down by 6.2 percentage points over last month, indicating that a lower proportion of manufacturing enterprises were optimistic for the production and business activities expectation within the next three months.

China's manufacturing PMI (Seasonally adjusted) 

Annotations:

1. Explanatory Notes

Purchasing Managers Index (PMI) is an index summarized and compiled through the results of the monthly survey of enterprises purchasing managers. It covers every links of the enterprises, including purchasing, production, logistics, and so on. It is one of the leading indices which was commonly adopted by international society to monitor the macroeconomic trends, and played an important role in forecasting and monitoring. The threshold of PMI is usually using 50 percent as the cut-off point for economic performance. If PMI above 50 percent, it reflects the manufacturing economy is expanding; if less than 50 percent, it reflects the manufacturing economy is in recession.

2.Statistical Coverage

The survey involves 31 divisions of manufacturing sector in the “Industrial Classification for National Economic Activities” (GB/T4754-2011). The survey sample was expanded from 820 to 3000 since January 2013. Due to the small sample size and lack of representativeness, some industries have been merged according to the similar homogeneity of industry, and there are 21 industries after merging.

3. Survey Methods

PPS (Probability Proportional to Size) sampling method was adopted in manufacturing purchasing managers’ survey. Using the divisions of the manufacturing sector as the selecting strata, the sample size of each division is proportional to its proportion of the value-added of the division to the total value-added of the manufacturing sector. Within the stratum, the samples are selected according to the probabilities proportional to their principal business revenues of the enterprises.

The survey was organized and conducted by staff members of survey offices, monthly through Online Reporting System of NBS by sending survey questionnaires to the purchasing managers of the selected enterprises.

4. Calculation Methods

The questionnaire of manufacturing purchasing managers survey covers 12 questions related to production, new orders, export orders, existing orders, finished goods inventory, purchase, import, purchase prices, raw materials, inventory, employees, suppliers, delivery time, production and business activities expectation and etc.. Diffusion index was calculated for each question, i.e. percentage of positive answers in number of enterprises plus half of the percentage in the same answers.

PMI is a composite index, which was calculated according to five diffusion indices (group indices) and their weights. 5 group indices and their weights are determined in accordance with their leading impact on the economy. Specifically, new orders index weighted 30 percent; production index weighted 25 percent; employees index weighted 20 percent; supplier delivery time index weighted 15 percent; raw materials inventory index weighted 10 percent. Of which, the supplier delivery time index is a converse index, and contrary calculation is needed when combines it into PMI.

5. Classification of Eastern, Central, Western and North-Eastern Regions

Eastern regions including Beijing, Tianjin, Hebei, Shanghai, Jiangsu, Zhejiang, Fujian, Shandong, Guangdong, Hainan; central regions including Shanxi, Anhui, Jiangxi, Henan, Hubei, Hunan; western regions including Inner Mongolia, Guangxi, Chongqing, Sichuan, Guizhou, Yunnan, Tibet, Shaanxi, Gansu, Qinghai, Ningxia, Xinjiang; north-eastern regions including Liaoning, Jilin, Heilongjiang.

6. Seasonal adjustment

The purchasing managers’ survey is a monthly survey, the data of the survey fluctuates very much for the influences of seasonal factors. The released PMI composite index and sub-indices are seasonally adjusted data.