Purchasing Managers Index for December 2023

Department of Service Statistics of NBS

China Federation of Logistics and Purchasing (CFLP)

 

1. Manufacturing Purchasing Managers Index

 

In December, the Purchasing Manager Index (PMI) of China's manufacturing industry was 49.0 percent, a decrease of 0.4 percentage point from the previous month, and the climate level of the manufacturing industry slightly fell.

 

 

In terms of enterprise size, the PMI for large enterprises was 50.0 percent, a decrease of 0.5 percentage points from the previous month, at the threshold; the PMI for medium-sized and small enterprises came in at 48.7 percent and 47.3 percent, a decrease of 0.1 percentage point and 0.5 percentage point from last month, below the threshold.

 

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

 

The production index was 50.2 percent, a decrease of 0.5 percentage point from the previous month, still higher than the threshold, indicating that manufacturing production activities kept expanding.

 

The new order index was 48.7 percent, a decrease of 0.7 percentage point from the previous month, indicating that the market demand of the manufacturing industry has slightly scaled down.

 

The raw material inventory index was 47.7 percent, a decrease of 0.3 percentage point from the previous month, indicating that the inventory of major raw materials in the manufacturing industry declined.

 

The employment index was 47.9 percent, a decrease of 0.2 percentage point from the previous month, indicating a slight decline in the climate level of employment of manufacturing enterprises.

 

The supplier delivery time index was 50.3 percent, flat from the previous month, still higher than the threshold, indicating that the delivery time of raw material suppliers in the manufacturing industry continued to decrease.

 

China's Manufacturing PMI (Seasonally Adjusted)

 

 

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

 

 

2. Non-manufacturing Purchasing Managers Index

 

In December, the non-manufacturing business activity index was 50.4 percent, an increase of 0.2 percentage point from the previous month, still higher than the threshold, indicating some acceleration in the expansion of the non-manufacturing industry.

 

 

By industry, the business activity index for the construction industry was 56.9 percent, an increase of 1.9 percentage points from the previous month; that for the service industry was 49.3 percent, unchanged from the previous month. From the perspective of industry, the business activity indexes for postal service, telecommunication, broadcast, television and satellite transmission services, monetary and financial services, and insurance were within the relatively high expansion range of 55.0 percent and above; the business activity indexes for waterway transportation, capital market services and real estate were below the threshold.

 

 

 

The new order index was 47.5 percent, an increase of 0.3 percentage point from the previous month, indicating that the decline in the non-manufacturing market demand continued to narrow. By industry, the new order index for the construction industry came in at 50.6 percent, an increase of 2.0 percentage points from the previous month; that for the service industry stood at 47.0 percent, an increase of 0.1 percentage point from the previous month.

 

The input price index was 49.6 percent, a decrease of 0.2 percentage point from the previous month, indicating a falling-off in the overall level of input prices used by non-manufacturing enterprises for business activities. By industry, the input price index for the construction industry came in at 51.4 percent, a decrease of 1.7 percentage points from the previous month; that for the service industry stood at 49.3 percent, an increase of 0.1 percentage point from the previous month.

 

The sales price index was 49.3 percent, an increase of 1.0 percentage point from the previous month, indicating a narrower decline in the overall non-manufacturing sales prices. By industry, the sales price index for the construction industry came in at 51.7 percent, an increase of 0.4 percentage point from the previous month; that for the service industry stood at 48.9 percent, an increase of 1.2 percentage points from the previous month.

 

The employment index was 47.1 percent, an increase of 0.2 percentage point from the previous month, indicating that the climate level of employment of non-manufacturing enterprises continued to pick up. By industry, the employment index for the construction industry came in at 51.7 percent, an increase of 3.5 percentage points from the previous month; that for the service industry stood at 46.3 percent, a decrease of 0.4 percentage point from the previous month.

 

The business activity expectation index was 60.3 percent, an increase of 0.5 percentage point from the previous month, indicating that most non-manufacturing enterprises showed optimism about the recent market recovery and development. By industry, the business activity expectation index for the construction industry came in at 65.7 percent, an increase of 3.1 percentage points from the previous month; that for the service industry stood at 59.4 percent, an increase of 0.1 percentage point from the previous month.

 

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

 

 

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

 

 

3. Composite PMI Output Index

 

In December, the composite PMI output index was 50.3 percent, a decrease of 0.1 percentage point from the previous month, higher than the threshold, indicating that the overall production and operation of Chinese enterprises maintained 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 every link of the enterprises, including purchasing, production, logistics, and so on. It is one of the leading indexes commonly adopted by international society to monitor the macroeconomic trends and plays an important role in forecasting and monitoring. The Composite PMI Output Index, belonging to the PMI system, is a composite index reflecting the changes in the output in current period of the entire industry (manufacturing and non-manufacturing industries). If the PMI is above 50 percent, it reflects the overall economy is expanding over the last month; if below 50 percent, it reflects the overall economy is in contraction over the last month.

 

2. Statistical Coverage

 

The survey involves 3200 samples from 31 divisions of the manufacturing industry in the “Industrial Classification for National Economic Activities” (GB/T4754-2017), as well as 4300 samples from 43 divisions of the non-manufacturing industry.

 

3. Survey Methods

 

PPS (Probability Proportional to Size) sampling method was adopted in the 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 directly subordinated to the NBS, monthly through the 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 index system of the manufacturing purchasing managers’ survey covers 13 sub-indexes such as production, new orders, new export orders, existing orders, finished goods inventory, purchase, import, purchasing price, producer price, raw materials inventory, employment, supplier delivery time, and production and operation expectation. The index system of non-manufacturing purchasing managers’ survey covers 10 sub-indexes such as business activities, new orders, new export orders, existing orders, finished goods inventory, input price, sales price, employment, supplier delivery time, and business activity expectation. Sub-indexes adopt the diffusion index calculation method, i.e. percentage of positive answers in a number of enterprises plus half of the percentage in the same answers. Due to the lack of non-manufacturing composite 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 indexes (group indexes) and their weights. 5 group indexes and their weights are determined in accordance with their leading impact on the economy. Specifically, new order index weighted 30 percent; production index weighted 25 percent; employment index weighted 20 percent; supplier delivery time index weighted 15 percent; raw materials inventory index weighted 10 percent. Among them, 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 of 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 readings are seasonally adjusted.