Purchasing Managers Index for June 2023

Department of Service Statistics of NBS

China Federation of Logistics and Purchasing (CFLP)

 

1. Manufacturing Purchasing Managers Index

 

In June, the Purchasing Manager Index (PMI) of China's manufacturing industry was 49.0 percent, increase 0.2 percentage point from the previous month, and the prosperity level of the manufacturing industry rose.

 

 

In terms of enterprise size, the PMI of large enterprises was 50.3 percent, increase 0.3 percentage point from the previous month; the PMI of medium-sized enterprises was 48.9 percent, increase 1.3 percentage points from the previous month; the PMI of small enterprises was 46.4 percent, decrease 1.5 percentage points from last month.

 

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

 

The production index was 50.3 percent, increase 0.7 percentage point from the previous month, rising above the threshold, indicating that manufacturing production activities have accelerated.

 

The new order index was 48.6 percent, increase 0.3 percentage point from the previous month, indicating that the market demand outlook of the manufacturing industry has improved.

 

The raw material inventory index was 47.4 percent, decrease 0.2 percentage point from the previous month, indicating that the inventory of major raw materials in the manufacturing industry continued to decline.

 

The employment index was 48.2 percent, decrease 0.2 percentage point from the previous month, indicating a slight decline in the employment outlook of manufacturing enterprises.

 

The supplier delivery time index was 50.4 percent, decrease 0.1 percentage point from the previous month, and still higher than the threshold, indicating that the delivery time of raw material suppliers in the manufacturing industry continues to decrease.

 

China's Manufacturing PMI (Seasonally Adjusted)

 

 

 

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

 

 

2. Non-manufacturing Purchasing Managers index

 

In June, the non-manufacturing business activity index was 53.2 percent, decrease 1.3 percentage points from the previous month, still higher than the threshold, and the non-manufacturing industry has been expanding this year.

 

 

By industry, the business activity index of the construction industry was 55.7 percent, decrease 2.5 percentage points from the previous month; the business activity index of the service industry was 52.8 percent, decrease 1.0 percentage point from the previous month. From the perspective of the industry, the business activity index of air transport, express mail service, telecommunications, radio and television and satellite transmission services, monetary and financial services and insurance was in the higher boom range of more than 60.0 percent; the business activity index of sectors such as wholesale, real estate and services to households was below the threshold.

 

 

 

The new order index was 49.5 percent, unchanged from the previous month, indicating that the market demand outlook of the non-manufacturing industry is basically unchanged. By industry, the sales price index of the construction industry was 48.7 percent, decrease 0.8 percentage point from the previous month; the index of new orders in the service industry was 49.6 percent, increase 0.1 percentage point from the previous month.

 

The input price index was 49.0 percent, increase 1.6 percentage points from the previous month, indicating that the decrease of overall level of input prices used by non-manufacturing enterprises for business activities has narrowed. By industry, the construction industry input price index was 51.8 percent, increase 7.1 percentage points from the previous month; the price index of service industry inputs was 48.6 percent, increase 0.7 percentage point from the previous month.

 

The sales price index was 47.8 percent, increase 0.2 percentage point from the previous month, indicating that the overall non-manufacturing sales prices have fallen. By industry, the sales price index of the construction industry was 51.6 percent, increase 4.7 percentage points from the previous month; the sales price index of the service industry was 47.2 percent, decrease 0.6 percentage point from the previous month.

 

The employment index was 46.8 percent, decrease 1.6 percentage points from the previous month, indicating that the employment outlook of non-manufacturing enterprises has declined. In terms of industries, the construction industry employee index was 47.2 percent, decrease 1.3 percentage points from the previous month; the employment index of service industry was 46.7 percent, decrease 1.6 percentage points from the previous month.

 

The expectation index of business activities was 60.3 percent, decrease 0.1 percentage point from the previous month, and continued to be in the higher boom range, indicating that non-manufacturing enterprises maintained strong confidence about the recent market recovery and development. By industry, the expectation index of business activities in the construction industry was 60.3 percent, decrease 1.8 percentage points from the previous month; the expected index of business activities in the service industry was 60.3 percent, increase 0.2 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 June, the comprehensive PMI output index was 52.3 percent, decrease 0.6 percentage point from the previous month, still in the expansion range, indicating that the overall production and operation of Chinese enterprises continued the momentum of 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 links of the enterprises, including purchasing, production, logistics, and so on. 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-indexes 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-indexes such as business activities, new orders, new export orders, existing orders, inventory, input price, sales price, employment, supplier delivery time, and business activities expectation. Sub-indexes adopt the method of diffusion index, 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 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 orders index weighted 30 percent; production index weighted 25 percent; employment index weighted 20 percent; supplier delivery time index weighted 15 percent; raw material 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-indexes are seasonally adjusted data.