Purchasing Managers Index for March 2020
Department of Service Statistics of NBS
China Federation of Logistics and Purchasing(CFLP)
In March, the situation of epidemic prevention and control continued to improve, the order of production and life was steadily restored, and the resumption of work and production of enterprises was significantly accelerated. China's Purchasing Manager Index(PMI) fell sharply last month and rebounded from the previous month's base, of which the PMI of manufacturing was 52.0 percent, 16.3 percentage points higher than the previous month; that of non-manufacturing business activity index was 52.3 percent, 22.7 percentage points higher than the previous month; the comprehensive PMI output index was 53.0 percent, 24.1 percentage points higher than the previous month. The recovery of PMI above the threshold in March was the rebound after the sharp drop in February, which more reflects that more than half of the surveyed enterprises had returned to work and production better than last month, and did not mean that China's economic operation had returned to normal. As of March 25, the return to work rate of large and medium-sized enterprises in the national purchasing manager survey was 96.6 percent, 17.7 percentage points higher than that in February.
1. Manufacturing Purchasing Managers Index
In March 2020, China's manufacturing PMI was 52.0 percent, up by 16.3 percentage points from last month.
In terms of enterprise scale, the PMI of large, medium and small enterprises was 52.6, 51.5 and 50.9 percent respectively, 16.3, 16.0 and 16.8 percentage points higher than that of last month.
According to the classification index, the five sub-indices composing PMI, the production index, new orders index and employment index were all above the threshold, while main raw materials inventory index and supplier distribution time index stayed below the threshold.
Production index was 54.1 percent, up by 26.3 percentage points from last month, indicating that the manufacturing production increased month on month.
New orders index was 52.0 percent, up by 22.7 percentage points from last month, indicating that the manufacturing market demand had recovered.
Main raw materials inventory index was 49.0 percent, higher 15.1 percentage points than last month, indicating that the pace of decline of main raw material inventory in manufacturing industry had narrowed.
The employment index was 50.9 percent, rose by 19.1 percentage points than last month, indicating that the that the number of manufacturing enterprises returning to work had increased.
Supplier distribution time index was 48.2 percent, rose by 16.1 percentage points than last month, indicating that the delivery time of raw material suppliers in manufacturing industry was still slower.
| China's Manufacturing PMI (Seasonally Adjusted) | ||||||
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| Production Index | New Orders Index | Main Raw Materials Inventory Index | Employed Person Index | Supplier Delivery Time Index | ||
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| 2019-March | 50.5 | 52.7 | 51.6 | 48.4 | 47.6 | 50.2 |
| April | 50.1 | 52.1 | 51.4 | 47.2 | 47.2 | 49.9 |
| May | 49.4 | 51.7 | 49.8 | 47.4 | 47.0 | 50.9 |
| June | 49.4 | 51.3 | 49.6 | 48.2 | 46.9 | 50.2 |
| July | 49.7 | 52.1 | 49.8 | 48.0 | 47.1 | 50.1 |
| August | 49.5 | 51.9 | 49.7 | 47.5 | 46.9 | 50.3 |
| September | 49.8 | 52.3 | 50.5 | 47.6 | 47.0 | 50.5 |
| October | 49.3 | 50.8 | 49.6 | 47.4 | 47.3 | 50.1 |
| November | 50.2 | 52.6 | 51.3 | 47.8 | 47.3 | 50.5 |
| December | 50.2 | 53.2 | 51.2 | 47.2 | 47.3 | 51.1 |
| 2020-January | 50.0 | 51.3 | 51.4 | 47.1 | 47.5 | 49.9 |
| February | 35.7 | 27.8 | 29.3 | 33.9 | 31.8 | 32.1 |
| March | 52.0 | 54.1 | 52.0 | 49.0 | 50.9 | 48.2 |
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| Related Indicators of China's Manufacturing PMI (Seasonally Adjusted) | ||||||||
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| New Export Orders Index | Import Index | Purchase Quantity Index | Main Raw Material Purchase Price Index | Producer Price Index | Finished Goods Inventory Index | Open Orders Index | Production And Business Activities Expectation Index |
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| 2019-March | 47.1 | 48.7 | 51.2 | 53.5 | 51.4 | 47.0 | 46.4 | 56.8 |
| April | 49.2 | 49.7 | 51.1 | 53.1 | 52.0 | 46.5 | 44.0 | 56.5 |
| May | 46.5 | 47.1 | 50.5 | 51.8 | 49.0 | 48.1 | 44.3 | 54.5 |
| June | 46.3 | 46.8 | 49.7 | 49.0 | 45.4 | 48.1 | 44.5 | 53.4 |
| July | 46.9 | 47.4 | 50.4 | 50.7 | 46.9 | 47.0 | 44.7 | 53.6 |
| August | 47.2 | 46.7 | 49.3 | 48.6 | 46.7 | 47.8 | 44.8 | 53.3 |
| September | 48.2 | 47.1 | 50.4 | 52.2 | 49.9 | 47.1 | 44.7 | 54.4 |
| October | 47.0 | 46.9 | 49.8 | 50.4 | 48.0 | 46.7 | 44.9 | 54.2 |
| November | 48.8 | 49.8 | 51.0 | 49.0 | 47.3 | 46.4 | 44.9 | 54.9 |
| December | 50.3 | 49.9 | 51.3 | 51.8 | 49.2 | 45.6 | 45.0 | 54.4 |
| 2020-January | 48.7 | 49.0 | 51.6 | 53.8 | 49.0 | 46.0 | 46.3 | 57.9 |
| February | 28.7 | 31.9 | 29.3 | 51.4 | 44.3 | 46.1 | 35.6 | 41.8 |
| March | 46.4 | 48.4 | 52.7 | 45.5 | 43.8 | 49.1 | 46.3 | 54.4 |
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2. Non-manufacturing purchasing managers index
In March 2020, China’s non-manufacturing business activities index was 52.3 percent, up by 22.7 percentage points than the previous month.
In terms of different industry, the service business activity index was 51.8 percent, up by 21.7 percentage points from last month. From the perspective of industry categories, except for capital market services, business activity indexes of other industries had rebounded to varying degrees. The construction business activity index was 55.1 percent, up by 28.5 percentage points from last month.
The new orders index was 49.2 percent, up by 22.7 percentage points from the previous month, indicating that the pace of decline of market demands in non-manufacturing industry had narrowed. In terms of different industry, the new order index of service industry was 49.3 percent, up by 22.3 percentage points over last month; that of construction industry was 48.4 percent, rose by 24.6 percentage points from last month.
The input price index was 49.4 percent, 0.1 percentage point higher than that of last month and still stayed below the threshold, indicating that the overall input price used by non-manufacturing enterprises for business activities was decreasing. In terms of different industry, the service industry input price index was 48.9 percent, 0.5 percentage point higher than last month; the construction industry input price index was 52.5 percent, 1.5 percentage points lower than last month.
The sales price index was 46.1 percent, up by 2.2 percentage points from last month, indicating that the overall decline of sales price of non-manufacturing industry had narrowed. By industry, the sales price index of service industry was 44.9 percent, up by 2.2 percentage points from last month; the sales price index of construction industry was 52.5 percent, up by 1.6 percentage points from last month.
The employment index was 47.7 percent, up by 9.8 percentage points from the previous month. In terms of industry, the employment index of service industry was 46.7 percent, up by 7.8 percentage points from last month; that of construction industry was 53.1 percent, rose by 20.8 percentage points from last month.
Business activities expectation index was 57.3 percent, higher 17.3 percentage points than last month, indicating that the confidence of non-manufacturing enterprises in recent market development had recovered. In terms of industry, the business activities expectation index in service industry was 56.8 percent, 17.1 percentage points higher than last month; that of construction industry was 59.9 percent, 18.1 percentage points higher than last month.
| Main Indices of China's Non-manufacturing PMI (Seasonally Adjusted) | ||||||
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| Non-manufacturing PMI | New Orders Index | Input Price Index | Sales Price Index | Employment Index | Business Activities Expectation Index |
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| 2019-March | 54.8 | 52.5 | 52.5 | 51.0 | 48.7 | 61.1 |
| April | 54.3 | 50.8 | 53.0 | 50.5 | 48.7 | 60.3 |
| May | 54.3 | 50.3 | 52.2 | 49.9 | 48.3 | 60.2 |
| June | 54.2 | 51.5 | 51.5 | 49.7 | 48.2 | 60.6 |
| July | 53.7 | 50.4 | 52.9 | 50.6 | 48.7 | 59.8 |
| August | 53.8 | 50.1 | 50.8 | 49.1 | 48.9 | 60.4 |
| September | 53.7 | 50.5 | 52.8 | 50.0 | 48.2 | 59.7 |
| October | 52.8 | 49.4 | 51.3 | 48.9 | 48.2 | 60.7 |
| November | 54.4 | 51.3 | 53.2 | 51.3 | 49.0 | 61.0 |
| December | 53.5 | 50.4 | 52.4 | 50.3 | 48.3 | 59.1 |
| 2020-January | 54.1 | 50.6 | 53.3 | 50.5 | 48.6 | 59.6 |
| February | 29.6 | 26.5 | 49.3 | 43.9 | 37.9 | 40.0 |
| March | 52.3 | 49.2 | 49.4 | 46.1 | 47.7 | 57.3 |
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| Other Indices of China's Non-manufacturing PMI (Seasonally Adjusted) | ||||
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| Foreign New Orders Index | Unfilled Orders Index | Stock Index | Supplier Delivery Time Index |
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| 2019-March | 49.9 | 45.0 | 47.1 | 51.5 |
| April | 49.2 | 44.2 | 46.3 | 51.5 |
| May | 47.9 | 44.4 | 46.6 | 51.7 |
| June | 48.5 | 44.4 | 46.0 | 51.4 |
| July | 48.4 | 44.4 | 45.5 | 52.0 |
| August | 50.3 | 44.1 | 47.0 | 52.1 |
| September | 47.3 | 43.9 | 46.4 | 51.9 |
| October | 48.1 | 44.0 | 46.7 | 51.8 |
| November | 48.8 | 44.6 | 47.4 | 52.1 |
| December | 47.8 | 44.5 | 47.2 | 52.2 |
| 2020-January | 48.4 | 43.6 | 47.2 | 52.1 |
| February | 26.8 | 35.2 | 39.3 | 28.3 |
| March | 38.6 | 43.0 | 46.1 | 46.4 |
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3. Composite PMI Output Index
In March 2020, the comprehensive PMI output index was 53.0 percent, 24.1 percentage points higher than that of last month, indicating that overall recovery of production and operation activities of Chinese enterprises had been faster.
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 Composite PMI Output Index, belonging to the PMI indicator system, is a composite index reflecting the changes in the output in current period of the entire industry (manufacturing and non-manufacturing industries). 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 overall economy is expanding; if less than 50 percent, it reflects the overall economy is in recession.
2. Statistical Coverage
The survey involves 31 divisions of manufacturing industry in the “Industrial Classification for National Economic Activities” (GB/T4754-2017), and 3000 samples, as well as 37 divisions of non-manufacturing industry, and 4000 samples.
3. Survey Methods
PPS (Probability Proportional to Size) sampling method was adopted in purchasing managers’ survey. Using the divisions of the manufacturing or non-manufacturing industry 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 or non-manufacturing industry. 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
(1) Calculation Methods of Sub-indices.
The indicator system of manufacturing purchasing managers’ survey covers 13 sub-indices such as production, new orders, export orders, existing orders, finished goods inventory, purchase, import, purchase price, producer price, raw materials inventory, employees, suppliers, delivery time, production and business activities expectation. Non-manufacturing purchasing manager’s survey involves 10 questions on production, new orders (business required), export, existing orders, finished goods inventory, intermediate input price, subscription price, employees, suppliers’ delivery time, and business activities expectation. The indicator system of non-manufacturing purchasing managers’ survey covers 10 sub-indices such as business activities, new orders, new export orders, existing orders, finished goods inventory, intermediate input price, subscription price, employees, suppliers delivery time, and business activities expectation. Sub-indices adopt diffusion index calculation method, i.e. percentage of positive answers in number of enterprises plus half of the percentage in the same answers. Due to the lack of synthesis of non-manufacturing integrated PMI index, the international society often used business activity index to reflect the overall changes in non-manufacturing economic development.
(2) Calculation Methods of Manufacturing PMI.
Manufacturing PMI 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; employee’s 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.
(3) Calculation Methods of Composite PMI Output Index.
Composite PMI Output Index was calculated by weighted summation of the manufacturing output index and non-manufacturing business activity index. Their weights are determined by the proportion manufacturing and non-manufacturing industries in GDP.
5. 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.