China’s official manufacturing PMI in January was 50.1, returning to the expansion zone

In January, the PMI rebounded to 50.1%, and the economy has stood at the starting point of endogenous recovery

On January 31, the National Bureau of Statistics released the January 2023 manufacturing purchasing managers index, non-manufacturing business activity index, and comprehensive PMI output index. Among them, the manufacturing purchasing managers index (PMI) was 50.1%, an increase of 3.1 percentage points from the previous month, and rose above the threshold; the non-manufacturing business activity index and the comprehensive PMI output index were 54.4% and 52.9%, respectively, compared with the previous month. Last month, it rose by 12.8 percentage points and 10.3 percentage points, both higher than the threshold.

As a leading indicator of economic operation, the PMI data recorded in January 2023 has rebounded sharply compared with December last year, and returned to the expansion range (48.0% in November 2022, 47.0% in December, and 50.1% in January 2023), reflecting After the peak of the epidemic, my country’s economy is bottoming out, and the overall economy is on the rise. Looking into the future, the economy has already stood at the starting point of endogenous recovery, and the plan for a year is in the spring. The author believes that at present, we should strengthen the regulation of macro-fiscal and monetary policies, and cooperate with the industry, technology, The coordination and coordination of the three major social policy arrangements have formed a joint force to promote a strong endogenous economic recovery.

First of all, judging from the 13 sub-indices of the manufacturing purchasing manager survey index system, the production and demand of the manufacturing industry have all recovered, external demand has further weakened, and prices are relatively stable. Specifically:

1. Both production and demand have improved: on the production side, the PMI production index in January was 49.8%, an increase of 5.2 percentage points from the previous month; on the demand side, the PMI new order index in January was 50.9%, an increase of 7.0 percentage points from the previous month, Both the production boom level of the manufacturing industry and market demand have improved, but due to the impact of the Spring Festival holiday, the improvement on the production side is less than that on the demand side;

2. External demand further weakened: the new export order index is a leading indicator of exports. Although the new export order index in January rose slightly by 1.9 percentage points from 44.2% in December last year to 46.1% (the import index rebounded by 3 percentage points to 46.7%, the internal Strong and externally weak), but still significantly below the critical point, indicating that external demand will further weaken. If external demand continues to weaken, it is necessary to focus on expanding domestic demand and give priority to the recovery and expansion of household consumption;

3. Prices are relatively stable: the purchase price of main raw materials, the ex-factory price index and the PPI (upstream producer price index) are basically in sync with each other. The index is relatively stable.

Secondly, in terms of the PMI of large, medium and small enterprises, the PMI of large enterprises is 52.3%, an increase of 4.0 percentage points from the previous month, which is higher than the threshold; the PMI of medium and small enterprises is 48.6% and 47.2%, respectively, an increase from the previous month 2.2 and 2.5 percentage points, both lower than the critical point. The author believes that the PMI of small and medium-sized enterprises has been in the contraction range for a long time, and their balance sheet self-repair ability is weaker than that of large enterprises, which is still the key resistance to the current endogenous economic recovery.

Judging from the social finance data in December, another leading economic indicator, the overall situation shows both aggregate and structural weakness. In December, the newly added social financing was 1.31 trillion yuan, a decrease of 1.05 trillion yuan from the same period of the previous year, which was a new low in the same period in the past three years. Among them, the relevant subjects representing the market’s willingness to finance independently, the medium and long-term loans of residents increased by 169.3 billion yuan year-on-year; Although medium- and long-term loans increased by 871.7 billion yuan year-on-year, it was mainly due to the policy-driven banks increasing medium- and long-term loans, and the increase in credit bond financing costs caused corporate financing to return to on-balance-sheet credit. Enterprises’ endogenous financing development needs were not the main reason . Looking into the future, whether the social financial structure can be optimized in the next stage after the peak of the epidemic is the key to judging the strength of the endogenous economic recovery.

On January 28, the State Council executive meeting pointed out that “to implement the spirit of the Central Economic Work Conference, focus on stabilizing growth, employment, and prices, and keep the economy operating within a reasonable range.” The main driving force of the economy, unswervingly expand opening up to the outside world, and promote foreign trade and foreign investment to maintain stability and improve quality.”

At the end of last year, the Central Economic Work Conference pointed out that “a prudent monetary policy must be precise and powerful. It is necessary to maintain reasonable and sufficient liquidity, keep the growth rate of broad money supply and social financing scale basically matching the nominal economic growth rate, and guide financial institutions to increase support for small support for micro-enterprises, technological innovation, and green development.”

The author believes that the follow-up macro-monetary policy still needs to take a firm and active “self-centered” approach. First, the total amount must be sufficient. Seize the window period of marginal easing of monetary policy, strengthen the balance sheets of private sector private enterprises and residents by lowering policy interest rates, help recover effective demand, boost confidence, and promote a strong endogenous recovery of the economy; secondly, investment must be accurate . Use structural monetary policy tools to achieve “precision drip irrigation”, and increase support for key areas and weak links such as inclusive small and micro enterprises, technological innovation, green development, and infrastructure.

Looking into the future, my country’s economy is already at the starting point of a new round of endogenous recovery. At the end of last year, the Central Economic Work Conference first pointed out before clarifying the five major economic tasks this year, “Economic work is complex, and we must proceed from the overall strategy, start with improving social psychological expectations and boost development confidence, and do a good job.” It can be seen that this year’s economic work will be based on and key to “improving expectations and boosting confidence”. At the moment, we have reasons to stay ahead of the economic cycle curve and grasp the certainty of the future with a rational and optimistic attitude.

Among all kinds of economic data, the manufacturing purchasing managers index is a data that can more intuitively reflect the operation status of the entire supply chain of the manufacturing industry.

For example, last year’s epidemic policy control was relatively strict, frequent outbreaks of epidemics in various places, and frequent city closures caused many links in the manufacturing industry to be in danger of coming to a standstill at any time. Last year’s manufacturing purchasing managers index, especially in the spring and summer after the closure of Shanghai, showed that manufacturing procurement Managers Index is always in contraction space.

Now that the epidemic is released, there will be no intermittent closures of cities and roads, and the chain of the supply chain will be smooth. Naturally, this index will return to the expansion range, which shows that my country’s manufacturing industry is moving towards returning to normal.