Purchasing Managers Index for August 2023

Department of Service Statistics of NBS

China Federation of Logistics and Purchasing (CFLP)

 

1. Manufacturing Purchasing Managers Index

 

In August, the Purchasing Manager Index (PMI) of China's manufacturing industry was 49.7 percent, increase 0.4 percentage point from the previous month, and the prosperity level of the manufacturing industry continued to improve.

 

 

In terms of enterprise size, the PMI of large, medium-sized and small enterprises was 50.8, 49.6 and 47.7 percent respectively, increase 0.5, 0.6 and 0.3 percentage points from the previous month;

 

From the sub-indexes, among the five sub-indexes that constitute the manufacturing PMI, the production index, new order index and supplier delivery time index were all higher than the threshold, and the raw material inventory index and employee index were lower than the threshold.

 

The production index was 51.9 percent, increase 1.7 percentage points from the previous month, indicating that manufacturing production activities have achieved increased expansion.

 

The new order index was 50.2 percent, increase 0.7 percentage points from the previous month, indicating that the market demand of the manufacturing industry has improved.

 

The raw material inventory index was 48.4 percent, increase 0.2 percentage point from the previous month, indicating that the decline of the inventory of major raw materials in the manufacturing industry continued to narrow.

 

The employment index was 48.0 percent, decrease 0.1 percentage point from the previous month, indicating that the employment outlook of manufacturing enterprises was basically unchanged.

 

The supplier delivery time index was 51.6 percent, increase 1.1 percentage points from the previous month, indicating that the delivery time of raw material suppliers in the manufacturing industry has decreased.

 

China's Manufacturing PMI (Seasonally Adjusted)

 

 

 

Related Indicators of China's Manufacturing PMI (Seasonally Adjusted)

 

 

2. Non-manufacturing Purchasing Managers index

 

In August, the non-manufacturing business activity index was 51.0 percent, decrease 0.5 percentage points from the previous month, still higher than the threshold, and the non-manufacturing industry continued to expand.

 

 

By industry, the business activity index of the construction industry was 53.8 percent, increase 2.6 percentage points from the previous month. The business activity index of the service industry was 50.5 percent, decrease 1.0 percentage points from the previous month. From the perspective of the industry, the business activity index of railway transportation, air transportation, accommodation, catering, telecommunications, radio and television and satellite transmission services, ecological protection and public facilities management, culture, sports and entertainment industries was in the high expansion range of more than 55.0 percent; the business activity indexes for capital market services, insurance, real estate were below the threshold.

 

 

 

The new order index was 47.5 percent, decrease 0.6 percentage points from the previous month, indicating that the prosperity index of the manufacturing market demand has declined. By industry, the new order index of the construction industry was 48.5 percent, increase 2.2 percentage point from the previous month; that for the service industry was 47.4 percent, decrease 1.0 percentage points from the previous month.

 

The input price index was 51.7 percent, increase 0.9 percentage points from the previous month, indicating that the overall level of input prices used by non-manufacturing enterprises for business activities continued to increase. By industry, the sales price index of the construction industry was 48.4 percent, decrease 2.3 percentage point from the previous month; the price index of service industry inputs was 52.3 percent, increase 1.5 percentage points from the previous month.

 

The sales price index was 50.0 percent, increase 0.3 percentage points from the previous month, reaching the threshold, which indicates that the overall non-manufacturing sales prices unchanged from the previous month. By industry, the sales price index of the construction industry was 50.4 percent, decrease 1.6 percentage point from the previous month; the sales price index of the service industry was 49.9 percent, increase 0.6 percentage points from the previous month.

 

The employment index was 46.8 percent, increase 0.2 percentage point from the previous month, indicating that the employment outlook of non-manufacturing enterprises has risen. In terms of industries, the construction industry employee index was 44.7 percent, decrease 0.5 percentage point from the previous month; that for the service industry was 47.2 percent, increase 0.4 percentage point from the previous month.

 

The business activity expectation index was 58.2 percent, decrease 0.8 percentage point from the previous month, and continued to be in the high expansion range, indicating that non-manufacturing enterprises were optimistic about the recent market recovery and development. By industry, the expectation index of business activities in the construction industry was 60.3 percent, decrease 0.2 percentage points from the previous month; the business activity expectation index in the service industry was 57.8 percent, decrease 0.9 percentage points from the previous month.

 

Main Indices of China's Non-manufacturing PMI (Seasonally Adjusted)

 

 

Other Indices of China's Non-manufacturing PMI (Seasonally Adjusted)

 

 

3. Composite PMI Output Index

 

In August, the Composite PMI output index was 51.3 percent, increase 0.2 percentage points from the previous month, still in the expansion range, indicating that the overall production and operation of Chinese enterprises continued the steady expansion.

 

 

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 the purchasing, production, logistics and other links of the enterprises, including manufacturing and non-manufacturing industeries. It is one of the leading indexes 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). 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 3200 samples, as well as 43 divisions of non-manufacturing industry, and 4300 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-indexes. 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. 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.