Text: Yan Xiang, Xu Ruchun
In June, the manufacturing PMI was 49.5%, unchanged from the previous month. The composite PMI output index came in at 50.5%, down from May. In terms of output, the mainland's economy has generally maintained expansion, but the foundation for sustained recovery still needs to be consolidated. Key conclusions:
The production and demand index corrected slightly. In June 2024, the production index and new orders index were 50.6% and 49.5%, respectively, down 0.2 and 0.1 percentage points month-on-month, respectively.
Price indices are mixed. Affected by factors such as the decline in global commodity prices and insufficient market demand, the purchase price of raw materials in the PMI recorded 51.7% in June, down 5.2 percentage points from the previous month. In terms of ex-factory prices, 47.9% were recorded in June, down 2.5 percentage points from May.
In terms of inventories, the trend of raw materials and finished goods inventories is differentiated. The raw material inventory sub-item in the manufacturing PMI recorded 47.6% in June, down 0.2 percentage points from the previous month. The finished goods inventory index recorded 48.3% in June, up 1.8 percentage points from May. With the start of the overseas replenishment cycle, the inventory situation of domestic enterprises is expected to improve.
The import and export boom of the manufacturing industry basically remained unchanged. The new export orders index recorded 48.3% in June, unchanged from the previous value. The import index rose by 0.1 percentage points from May to 46.9%.
The prosperity of small and medium-sized enterprises has shown signs of recovery. With the expert business symposium on May 23, the prosperity of small and medium-sized enterprises has rebounded. In June, the small business sub-component of the PMI index recorded 47.4%, which was still below the boom and bust line, but increased by 0.7 percentage points from May. Medium-sized enterprises recorded a 49.8% increase, up 0.4 percentage points from May. The prosperity of large enterprises showed a correction, recording 50.1% in June, down 0.6 percentage points from May.
Manufacturing production and business activities are expected to rebound at the bottom. In June 2024, the production expectation index of manufacturing enterprises recorded 54.4%, an increase of 0.1 percentage points from the previous month, but the current expectations of manufacturing enterprises are still at a low level.
Although the prosperity of the construction industry and the service industry declined slightly, it was still in the expansion range. The construction PMI index for June 2024 was 52.3%, down 2.1 percentage points from May. With the end of the May Day holiday, the service PMI fell in June. The services PMI came in at 50.2% in June, down 0.3 percentage points from May.
Construction and service business expectations are mixed. In June, the business expectation index for the service sector recorded 57.6%, up 0.6 percentage points month-on-month. The Construction Business Expectations Index recorded 54.7% in June, down 1.6 percentage points from May. With the follow-up real estate policy continues to increase and the construction of dual-use infrastructure continues to advance, the confidence of the construction industry is expected to rebound.
Risk warning: First, the macro changes exceed expectations, and the second is the large fluctuations in overseas markets.
In the body of the report, the manufacturing PMI index was flat in June, and the manufacturing PMI was 49.5%, which was the same as the previous month. The composite PMI output index came in at 50.5%, down from May. In terms of output, the mainland's economy has generally maintained expansion, but the foundation for sustained recovery still needs to be consolidated.
2. The production and demand index of the differentiation of business prosperity indicators has pulled back slightly. In June 2024, the production index and new orders index were 50.6% and 49.5%, respectively, down 0.2 and 0.1 percentage points month-on-month, respectively. Price indices are mixed. Affected by factors such as the decline in global commodity prices and insufficient market demand, the purchase price of raw materials in the PMI recorded 51.7% in June, down 5.2 percentage points month-on-month. In terms of ex-factory prices, 47.9% were recorded in June, down 2.5 percentage points from May. In terms of inventories, the trend of raw materials and finished goods inventories is differentiated. The raw material inventory sub-item in the manufacturing PMI recorded 47.6% in June, down 0.2 percentage points from the previous month. The finished goods inventory index recorded 48.3% in June, up 1.8 percentage points from May. With the start of the overseas replenishment cycle, the inventory situation of domestic enterprises is expected to improve. The import and export boom of the manufacturing industry basically remained unchanged. The new export orders index recorded 48.3% in June, unchanged from the previous value. The import index rose by 0.1 percentage points from May to 46.9%.
The prosperity of small and medium-sized enterprises has shown signs of recovery. With the expert business symposium on May 23, the prosperity of small and medium-sized enterprises has rebounded. In June, the small business sub-component of the PMI index recorded 47.4%, which was still below the boom and bust line, but increased by 0.7 percentage points from May. Medium-sized enterprises recorded a 49.8% increase, up 0.4 percentage points from May. The prosperity of large enterprises showed a correction, recording 50.1% in June, down 0.6 percentage points from May.
Manufacturing production and business activities are expected to rebound at the bottom. In June 2024, the production expectation index of manufacturing enterprises recorded 54.4%, an increase of 0.1 percentage points from the previous month, but the current expectations of manufacturing enterprises are still at a low level.
3. The non-manufacturing index is in the expansion range, and although the prosperity of the construction industry and the service industry has declined slightly, it is still in the expansion range. The construction PMI index for June 2024 was 52.3%, down 2.1 percentage points from May. With the end of the May Day holiday, the service PMI fell in June. The services PMI came in at 50.2% in June, down 0.3 percentage points from May.
Construction and service business expectations are mixed. In June, the business expectation index for the service sector recorded 57.6%, up 0.6 percentage points month-on-month. The Construction Business Expectations Index recorded 54.7% in June, down 1.6 percentage points from May. With the follow-up real estate policy continues to increase and the construction of dual-use infrastructure continues to advance, the confidence of the construction industry is expected to rebound.
4. Risk warning: First, macro changes exceed expectations, and second, overseas markets fluctuate sharply.
This article is from the report "PMI Data Commentary: Manufacturing Prosperity Remains Stable" released by Huafu Securities Research Institute on June 30, 2024.
Analyst:
燕翔， S0210523050003
许茹纯， S0210523060005
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