Interpretation of China's manufacturing purchasing managers' index (PMI) of 49.5% in June 2024 and analysis of the current situation of mainland economic operation
Interpretation of China's manufacturing PMI data in June 2024
I. Introduction
In June 2024, China's manufacturing purchasing managers' index (PMI) was announced at 49.5%, unchanged from the previous month. This data is an important indicator to reflect the overall operation of China's manufacturing industry, which is of great significance for analyzing the current economic situation and predicting future trends. This article will interpret the PMI data from multiple perspectives and deeply analyze the current situation of the mainland's economic operation.
2. Interpretation of PMI data
(1) The overall operation of the manufacturing industry
The PMI index takes 50% as the boom and bust line, and when the index is higher than 50%, it means that the manufacturing industry is in a state of expansion; When the index is below 50%, it indicates that the manufacturing sector is in a state of contraction. In June 2024, China's manufacturing PMI was 49.5%, which was the same as the previous month, but still below the boom and bust line, indicating that the manufacturing industry as a whole is still in a state of contraction. However, judging from the data changes, the PMI index has not declined sharply, indicating that the manufacturing industry is relatively stable.
(2) Sub-index analysis
1. Production index: The production index was 50.6%, down 0.2 percentage points from the previous month, but still above the critical point, indicating that manufacturing production activities continued to maintain an expansion trend. From the perspective of industries, the production index of metal products, railways, ships, aerospace equipment and other industries is relatively high, and the production of related industries has maintained rapid growth; The production index of textile, petroleum and coal industries is low, and the production activities of enterprises have slowed down.
2. New Orders Index: The new orders index was 49.5%, a slight decrease of 0.1 percentage points from the previous month, indicating that the demand in the manufacturing market is still insufficient. From the perspective of industry, the market demand of some industries, such as paper printing, railway, ship, aerospace equipment, etc., has been released quickly; The market demand for chemical raw materials and chemical products is insufficient.
3. Price index: The purchase price index and ex-factory price index of major raw materials were 51.7% and 47.9% respectively, down 5.2 and 2.5 percentage points from the previous month. This is mainly due to factors such as the recent decline in the prices of some commodities and the lack of market demand.
4. Business expectations: The production and business activity expectation index was 54.4%, an increase of 0.1 percentage points from the previous month, indicating that manufacturing enterprises have stable expectations for market development. From the perspective of industries, some industries, such as agricultural and sideline food processing, metal products and other production and business activity expectation indexes are high, and enterprises have strong confidence in the development of the industry.
(3) The growth of new kinetic energy
From the perspective of key industries, the PMI index of high-tech manufacturing and equipment manufacturing industry is higher than the overall level of the manufacturing industry, showing a trend of continuous growth of new momentum. Among them, the high-tech manufacturing PMI was 52.3%, which remained in the expansion range for 8 consecutive months; The equipment manufacturing PMI was 51.0%, maintaining expansion for four consecutive months. This shows that the transformation and upgrading of the mainland's manufacturing industry continues to advance, and the new quality productivity continues to grow and develop.
3. Analysis of the current situation of the mainland's economic operation
(1) Overall operating status
It can be seen from the PMI data that the mainland economy has generally maintained an expansion trend, but the foundation for sustained recovery still needs to be consolidated. Although the manufacturing industry is in a state of contraction, production activities have maintained an expansion trend, showing some resilience. At the same time, new drivers continue to grow, and emerging industries such as high-tech manufacturing and equipment manufacturing are developing rapidly, providing strong support for the mainland's economic transformation and upgrading.
(2) Challenges
1. Insufficient market demand: The new orders index and the new export orders index both show weak market demand in the manufacturing industry, which is mainly affected by factors such as the slow recovery of the global economy and the rise of trade protectionism. Insufficient market demand is one of the main challenges facing the manufacturing industry today.
2. Cost pressure: Although the prices of some commodities have declined recently, the overall price of raw materials is still at a high level, which has brought certain cost pressure to enterprises. At the same time, factors such as rising labor costs and increasing environmental protection requirements have also had a certain impact on business operations.
3. Structural problems: The mainland manufacturing industry is still facing structural problems, such as overcapacity and serious product homogeneity. These problems limit the transformation, upgrading and high-quality development of the manufacturing industry.
(3) Policy recommendations
1. Expand market demand: The government should continue to increase investment in infrastructure construction, promote consumption upgrading and export diversification to expand market demand. At the same time, we should strengthen international cooperation and promote the process of global trade liberalization and facilitation.
2. Reduce enterprise costs: The government should continue to promote the policy of tax and fee reduction to reduce the tax burden of enterprises; Strengthen the price supervision of energy and raw materials to prevent the rapid rise in prices from bringing cost pressure to enterprises; Encourage enterprises to increase R&D investment and technological innovation to improve product added value and competitiveness.
3. Promote the transformation and upgrading of the manufacturing industry: The government should strengthen the guidance and support for the manufacturing industry, and promote the development of the manufacturing industry in the direction of high-end, intelligent and green. At the same time, strengthen the training and introduction of talents, and improve the quality and innovation ability of manufacturing talents.
IV. Conclusions
China's manufacturing purchasing managers' index (PMI) in June 2024 was 49.5%, which was lower than the boom and bust line but was stable overall. The mainland's economy has generally maintained an expansion trend, but it is facing challenges such as insufficient market demand. The government should continue to increase policy support to promote the transformation and upgrading of the manufacturing industry and high-quality development, and at the same time strengthen international cooperation to jointly address risks and challenges such as the slow global economic recovery.