Purchasing Managers Index for May 2022

Department of Service Statistics of NBS

China Federation of Logistics and Purchasing (CFLP)

 

1. Manufacturing Purchasing Managers Index

 

In May, the Purchasing Manager Index (PMI) of China's manufacturing industry was 49.6 percent, which was lower than the threshold, but increased by 2.2 percentage points over the previous month. The overall prosperity level of the manufacturing industry has improved.

 

 

From the perspective of enterprise scale, the PMI of large enterprises was 51.0 percent, up 2.9 percentage points from the previous month, returning to above the threshold; the PMI of medium and small-sized enterprises was 49.4 and 46.7 percent, up 1.9 and 1.1 percentage points over the previous month, and continued to be below the threshold.

 

From the perspective of sub-indexes, the five sub-indexes constituting the manufacturing PMI were all below the threshold.

 

The production index was 49.7 percent, an increase of 5.3 percentage points over the previous month, indicating that the manufacturing industry has improved.

 

The new order index was 48.2 percent, an increase of 5.6 percentage points over the previous month, indicating that the decline in the market demand of the manufacturing industry was narrowed.

 

The raw material inventory index was 47.9 percent, an increase of 1.4 percentage points over the previous month, indicating that the decline in the inventory of main raw materials in the manufacturing industry narrowed.

 

The employment index was 47.6 percent, up 0.4 percentage point from the previous month, indicating that the employment boom of manufacturing enterprises rebounded slightly.

 

The supplier delivery time index was 44.1 percent, up 6.9 percentage points from the previous month, still below the threshold, indicating that the delivery time of raw material suppliers in the manufacturing industry was still slow.

 

 

 

2. Non-manufacturing Purchasing Managers Index

 

In May, the non-manufacturing business activity index was 47.8 percent, an increase of 5.9 percentage points over the previous month, and the prosperity level of the non-manufacturing industry was significantly improved.

 

 

By industry, the business activity index of the construction industry was 52.2 percent, down 0.5 percentage point from the previous month. The business activity index of the service industry was 47.1 percent, up 7.1 percentage points from the previous month. In terms of industry conditions, the business activity indexes of railway transportation, air transportation, postal service, telecommunications, and radio and television, satellite transmission services were in the higher boom range of more than 55.0 percent; the business activity index of accommodation, other finance, leasing and business services, ecological protection and environmental governance industries continued to be below the threshold.

 

 

 

The new order index was 44.1 percent, up 6.7 percentage points from the previous month, still below the threshold, indicating that the prosperity level of non-manufacturing market demand has recovered. By industry, the new order index of the construction industry was 46.4 percent, up 1.1 percentage points from the previous month; the index of new orders in the service industry was 43.7 percent, up 7.7 percentage points from the previous month.

 

The input price index was 52.5 percent, down 1.2 percentage points from the previous month, still higher than the threshold, indicating that the overall increase in the price of inputs used by non-manufacturing enterprises for business activities narrowed. By industry, the construction industry input price index was 52.4 percent, down 7.9 percentage points from the previous month; and the price index of service industry inputs was 52.5 percent, down 0.1 percentage point from the previous month.

 

The sales price index was 49.4 percent, an increase of 0.5 percentage point over the previous month, still below the threshold, indicating that the decline in the overall level of non-manufacturing sales prices narrowed. By industry, the sales price index of the construction industry was 51.5 percent, down 1.7 percentage points from the previous month; and the sales price index of the service industry was 49.0 percent, up 0.9 percentage point from the previous month.

 

The employment index was 45.3 percent, down 0.1 percentage point from the previous month, indicating that the employment prosperity of non-manufacturing enterprises was still at a low level. By industry, the employment index of the construction industry was 45.5 percent, up 2.4 percentage points from the previous month; The index of service industry employees was 45.3 percent, decreased by 0.5 percentage point over the previous month.

 

The expected index of business activities was 55.6 percent, an increase of 2.0 percentage points over the previous month, higher than the threshold, indicating that non-manufacturing enterprises have increased their confidence in the recent recovery and development of the industry. By industry, the expected index of business activities in the construction industry was 57.9 percent, up 0.9 percentage point from the previous month; and the expected index of business activities in the service industry was 55.2 percent, up 2.2 percentage points from the previous month.

 

Main Indices of China's Non-manufacturing PMI (Seasonally Adjusted)
Unit: %
	Business Activity Index	New Orders Index	Input Price Index	Sales Price Index	Employment Index	Business Activities Expectation Index
2021-May	55.2	52.2	57.7	52.8	48.9	62.9
June	53.5	49.6	53.4	51.4	48.0	60.8
July	53.3	49.7	53.5	51.3	48.2	60.7
August	47.5	42.2	51.3	49.3	47.0	57.4
September	53.2	49.0	53.5	50.5	47.8	59.1
October	52.4	49.0	57.8	52.7	47.5	58.8
November	52.3	48.9	50.8	50.1	47.3	58.2
December	52.7	48.4	49.3	48.1	47.6	57.3
2022-January	51.1	47.8	52.1	51.0	46.9	57.9
February	51.6	47.6	53.9	49.8	48.0	60.5
March	48.4	45.7	55.9	51.1	47.1	54.6
April	41.9	37.4	53.7	48.9	45.4	53.6
May	47.8	44.1	52.5	49.4	45.3	55.6

 

Other Indices of China's Non-manufacturing PMI (Seasonally Adjusted)
Unit: %
	Foreign New Orders Index	Open Orders Index	Stock Index	Supplier Delivery Time Index
2021-May	47.6	44.7	47.2	50.8
June	45.4	43.8	47.0	51.0
July	47.7	44.8	47.3	51.3
August	43.9	42.9	45.9	49.2
September	46.4	44.2	45.9	50.4
October	47.5	44.3	45.5	49.7
November	47.5	43.9	45.6	50.1
December	47.7	43.4	46.4	49.6
2022-January	46.0	43.9	47.0	49.2
February	48.1	44.1	46.6	49.8
March	45.8	42.8	45.9	45.2
April	42.7	41.2	43.9	42.8
May	42.8	43.2	45.2	45.3

 

3. Composite PMI Output Index

 

In May, the comprehensive PMI output index was 48.4 percent, an increase of 5.7 percentage points over the previous month, indicating that the production and operation prosperity of Chinese enterprises has recovered.

 

 

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 43 divisions of non-manufacturing industry, and 4200 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, supplier’s 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.