China's PMI Remained at the Same Level over Last Month in December
Department of Service Statistics of NBS
China Federation of Logistics and Purchases (CFLP)
In December, China's manufacturing purchasing managers index (PMI) was 50.6 percent, which remained at the same level over last month.
In view of the sizes of enterprises, the PMI of large-sized enterprises was 51.1 percent, slightly decreased 0.3 percentage points month-on-month, stayed above the threshold for four consecutive months. That of medium-sized and small-sized enterprises was 49.9 and 48.1 percent respectively, below the threshold but increased 0.2 and 2.0 percentage points respectively month-on-month.
In December, among the five sub-indices composing PMI, one sub-index increased, one sub-index kept at the same level, while that of the other three sub-indices decreased.
Production index was above the threshold, which was 52.0 percent, decreased 0.5 percentage points month-on-month, positioned above the threshold, which indicating that manufacturing production kept expanding, while the growth rate decreased slightly. In view of different industries, agro-food processing industry, automobile manufacturing, textile wearing apparel manufacturing, ferrous metal mining and processing, electrical machinery and equipment manufacturing gained significantly increasing, while tobacco manufacturing, non-metallic mineral products manufacturing, processing and coking of petroleum gained decreasing.
In December, the new orders index was 51.2 percent, kept at the same level over last month, positioned above the threshold for three consecutive months, showing that the manufacturing market demand continued to rise. In view of different industries, along with the holiday effect, the new orders indices of the industries related to consumer goods, such as agro-food processing industry, automobile manufacturing, textile wearing apparel manufacturing stayed at 60 percent and above, and the market demand were relatively strong. While that of non-metallic mineral products manufacturing, tobacco manufacturing, smelting and processing of non-ferrous metal ores dropped back significantly, positioned below the threshold, and the amount of product orders declined. The survey results showed that foreign new orders index was 50.0 percent, decreased 0.2 percentage points, month-on-month; the import index was 49.0 percent, increased 0.5 percentage points month-on-month, still below the threshold.
Main raw materials inventory index was 47.3 percent, down by 0.6 percentage points month-on-month, still below the threshold, which indicated that the raw materials inventory continued to reduce. In view of different industries, the main raw materials inventory of agro-food processing industry, pharmaceutical manufacturing, ferrous metal mining and processing, textile wearing apparel manufacturing increased, that of special equipment manufacturing, textile industry, computer communications, electronic equipment and instrumentation manufacturing, non-metallic mineral products manufacturing went down significantly.
Employed person index was 49.0 percent, slightly increased 0.3 percentage points month-on-month, stayed below the threshold for seven consecutive months, which indicated that the employment in manufacturing enterprises reduced, while that of decreasing amplitude narrowed. In view of different industries, the employed person indices of tobacco manufacturing, agro-food processing industry, pharmaceutical manufacturing, foods, liquor, beverages and fine tea manufacturing were above the threshold, employment continued to increase. The employment of special equipment manufacturing, computer communications, electronic equipment and instrumentation manufacturing, fabricated metal products manufacturing, textile industry continued to decrease.
Supplier delivery time index was 48.8 percent, 1.1 percentage points lower month-on-month and lower than the threshold, which indicated that the manufacturing supplier delivery time slowed down than last month.
Main raw material purchase price index was 53.3 percent, a sharp rise of 3.2 percentage points month-on-month, stayed above the threshold for four consecutive months. In view of different industries, the month-on-month prices of ferrous metal mining and processing, agro-food processing industry, fabricated metal products manufacturing, tobacco manufacturing increased obviously, and enterprises’ cost pressure of production increased. The main raw material purchase price indices of electrical machinery and equipment manufacturing, computer communications, electronic equipment and instrumentation manufacturing stayed below the threshold.
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| Unit: % | ||||||
| 2012 | PMI | | ||||
| Production Index | New Orders Index | Main Raw Materials Inventory Index | Employed Person Index | Supplier Delivery Time Index | ||
| | | | | | | |
| January | 50.5 | 53.6 | 50.4 | 49.7 | 47.1 | 49.7 |
| February | 51.0 | 53.8 | 51.0 | 48.8 | 49.5 | 50.3 |
| March | 53.1 | 55.2 | 55.1 | 49.5 | 51.0 | 48.9 |
| April | 53.3 | 57.2 | 54.5 | 48.5 | 51.0 | 49.6 |
| May | 50.4 | 52.9 | 49.8 | 45.1 | 50.5 | 49.0 |
| June | 50.2 | 52.0 | 49.2 | 48.2 | 49.7 | 49.1 |
| July | 50.1 | 51.8 | 49.0 | 48.5 | 49.5 | 49.0 |
| August | 49.2 | 50.9 | 48.7 | 45.1 | 49.1 | 50.0 |
| September | 49.8 | 51.3 | 49.8 | 47.0 | 48.9 | 49.5 |
| October | 50.2 | 52.1 | 50.4 | 47.3 | 49.2 | 50.1 |
| November | 50.6 | 52.5 | 51.2 | 47.9 | 48.7 | 49.9 |
| December | 50.6 | 52.0 | 51.2 | 47.3 | 49.0 | 48.8 |
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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), and totally 820 sampling enterprises are selected and surveyed countrywide.
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 conducted 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 11 questions related to production, new orders, export orders, existing orders, finished goods inventory, purchase, import, purchase prices, raw materials, inventory, employees, suppliers, delivery time, 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. 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.