21st Century Business Herald reporter Jiao Yifei reported from Beijing that the PMI has been in the contraction range for two consecutive months, and both ends of production and demand have weakened.
On June 30, the National Bureau of Statistics released the latest data, in June, the manufacturing purchasing managers' index (PMI) was 49.5%, the same as the previous month, and it was below the boom and bust line for two consecutive months.
Judging from the 13 sub-indexes, compared with the previous month, the finished goods inventory index, import index and production and business activity expectation index increased, with the index rising between 0.1 and 1.8 percentage points; the new export orders index and the employment index were flat; the production index, the new orders index, the backlog order index, the purchase volume index, the purchase price index, the factory price index, the raw material inventory index and the supplier delivery time index declined, with the index falling between 0.1 and 5.2 percentage points.
The interviewed experts said that the economy is still in the stage of accumulating upward strength, and the downward pressure is still greater. Since the beginning of this year, a number of policies to stabilize growth and promote a rebound have been put forward and strengthened, and their results have been continuously revealed, gradually enhancing the strength of the economic rebound. However, special attention should be paid to the problem of demand contraction, and a number of high-frequency indices also reflect the current high temperature and rainy weather, and the continued weakness of traditional kinetic energy has a more obvious impact, and it is necessary to significantly increase the countercyclical adjustment of macroeconomic policies and accelerate the transformation of demand contraction to demand expansion.
The demand side continues to weaken
At present, the demand side continues to weaken. The new orders index in June was 49.5 percent, down 0.1 percentage points from the previous month, and the new export orders index was 48.3 percent, the same as the previous month.
From the perspective of industries, the new order index of papermaking, printing, cultural, educational, sports, aesthetic and entertainment products, railways, ships, aerospace equipment, computer communication and electronic equipment and other industries was higher than 53.0%, and the market demand of related industries was released quickly; The new order index of chemical raw materials and chemical products, non-metallic mineral products and other industries are running at a low level, and enterprises reflect that the lack of effective demand is the main difficulty they are currently facing.
According to the enterprise survey of the China Federation of Logistics and Purchasing, the proportion of manufacturing enterprises reflecting insufficient market demand was 62.4%, an increase of 1.8 percentage points from the previous month, indicating that manufacturing enterprises have a strong feeling of weak market demand.
Wen Tao, an analyst at the China Logistics Information Center, said that the mainland's manufacturing market demand is still facing the overall weak problem, mainly dragged down by the contraction of the demand for basic raw materials. The new orders index and new export orders index of high-energy-consuming industries were 45.9% and 47% respectively, both down by about 1 percentage point from the previous month. Judging from the change range of the new orders index and the new export index, the current overall market demand fluctuates little, but from the index level and corporate feedback, the market demand continues to be weak.
The recent release of high-frequency data also confirms the reality of weak demand. Since June, road freight and logistics have weakened, passenger transport has been weakly repaired, and residents' consumption performance has been weak, and the effect of "6.18" in exchanging price for volume is not good.
In terms of highway logistics, according to G7 data, as of June 29, the year-on-year decline in vehicle freight flow, throughput of public logistics parks, and throughput of distribution centers of major express delivery companies in June has expanded. As of June 23, the volume of high-speed trucks, postal express delivery and collection in the past four weeks has fallen year-on-year, while the volume of railway freight has increased.
In terms of passenger traffic, Flush iFinD data shows that as of June 29, the year-on-year growth rate of Baidu's migration index in June was 0.7%, down 1.8 percentage points from May, the average daily passenger volume of the subway in 24 cities increased by 7.6% year-on-year, down 0.2 percentage points from May, and the domestic flight was -1.0% year-on-year, down 0.6 percentage points from May.
In terms of household consumption, although June coincided with the "618" e-commerce promotion, the year-on-year performance of retail consumption was weak. Xingtu monitoring data shows that the total sales of integrated e-commerce and live broadcast platforms during the "618" period in 2024 will reach 778.5 billion yuan, a year-on-year decrease of 2.5%. Among them, the total retail sales of integrated e-commerce platforms reached 571.7 billion yuan, a year-on-year decrease of 6.9%; The sales volume of the live broadcast platform was 206.8 billion yuan, a year-on-year increase of 12.1%, a slowdown of 15.5 percentage points from last year.
Wu Chaoming, vice president of the Finance and Credit Research Institute, told the 21st Century Business Herald that the current change in the PMI of large, medium and small enterprises is consistent with the change direction of the new order index, indicating that the current demand change is the main determinant of the prosperity of enterprises of different sizes. The decline in new orders from large enterprises this month was mainly affected by the downturn in the real estate market and the slow development of domestic policies. The index of new orders of medium-sized enterprises rebounded, but the index of new export and import orders both fell, indicating that domestic demand is the main support for the rebound of new orders of medium-sized enterprises, or mainly due to the implementation of large-scale equipment modernization and transformation policies. The recovery in demand from small businesses has benefited more from export orders. In the future, whether the PMI of small enterprises can rise to the expansion range will face repeated and twists and turns, and policies need to continue to strengthen support.
New drivers support the growth of the production side
From the perspective of production, the production index in June was 50.6%, although it decreased slightly by 0.2 percentage points from the previous month, it still remained in the expansion range.
Zhou Maohua, a macro researcher at the financial market department of Everbright Bank, told the 21st Century Business Herald that the current expansion of production and the contraction of new orders reflect that the recovery of demand is slow relative to production and supply, and prices continue to remain low. In addition, many provinces in the mainland suffered from extreme weather such as heavy rainfall in June, which inevitably hindered and affected logistics, transportation and distribution, enterprise start-up, sales and manufacturing activities. The implementation of domestic macro policies needs to be further strengthened to accelerate the recovery of consumption and domestic demand, and promote a virtuous cycle of supply and demand.
Looking back on the whole of June, the rainstorm in the south was widespread, heavy and extreme, and the rainfall in many places broke historical records. Since June 2, the Central Meteorological Observatory has issued rainstorm warnings for 30 consecutive days.
From the perspective of high-frequency data, in the past four weeks (May 29 to June 25), the national cement shipment and infrastructure cement direct supply were -22.7% and -9.2% year-on-year respectively, the decline was 1.1 and 3.7 percentage points respectively, and the apparent demand for steel and building materials was -20.8% year-on-year, the decline was 3 percentage points higher than that at the end of May.
At the same time, the rate of infrastructure funds in place has fallen, and housing construction funds have recovered from a low level. According to the statistics of Centennial Construction Network, in the week of June 25, the rate of non-housing construction funds fell by 1.36 percentage points from the end of May to 64.96%, and the rate of housing construction funds increased by 3.04 percentage points from the end of May to 49.27%.
Wen Tao, an analyst at China Logistics Information Center, said that in June, a prominent positive change in the macro economy was the acceleration of new growth momentum. The equipment manufacturing PMI was 51%, up 0.3 percentage points from the previous month, and its production index and new orders index both rose from the previous month, rising to more than 53% and 52% respectively, showing that both ends of supply and demand in the equipment manufacturing industry have accelerated their rise. The PMI of high-tech manufacturing was 52.3%, up 1.6 percentage points from the previous month, and the production index was close to 54%, up more than 1 percentage point from the previous month, and the new orders index was 53%, up nearly 2 percentage points from the previous month, showing that the growth rate of high-tech manufacturing industry increased significantly from the previous month.
Wu Chaoming said that in June, the production index and the new orders index both fell month-on-month, and the former fell even more, resulting in the "difference between the production and new orders index" in the manufacturing industry from 1.2% last month to 1.1% this month. On the whole, the lack of domestic demand is still the core contradiction of the current economic operation, and it is expected that the future will still show a pattern of strong supply and weak demand, but benefiting from the implementation of a package of policies to expand domestic demand and stabilize growth, the future domestic supply and demand convergence role will be enhanced, and the positive gap between supply and demand will run in the low range.
The differentiation of upstream and downstream prices squeezes corporate profits
It is worth noting that under the influence of insufficient demand, the price of raw materials has fallen. According to the data of the National Bureau of Statistics, after two consecutive months of rapid rise, the growth rate of raw material prices in the manufacturing industry slowed down significantly, and the purchase price index in June was 51.7%, down 5.2 percentage points from the previous month, a significant decline.
Wen Tao pointed out that due to the continuous rapid rise in the purchase price of raw materials from April to May, the cost pressure on manufacturing enterprises increased, and in June, enterprises reduced the purchase of raw materials, increased the consumption of raw materials in inventory, and the price support of raw materials weakened accordingly. The purchase volume index and raw material inventory index were 48.1% and 47.6% respectively, down 1.2 and 0.2 percentage points from the previous month.
According to data from the National Bureau of Statistics, in early and mid-June, the market prices of important means of production were in a downward trend as a whole. From the perspective of enterprise survey, the proportion of manufacturing enterprises reflecting high raw material costs in June was 43.7%, down 1.2 percentage points from the previous month.
However, the decline in the factory price index was more pronounced. The factory price index fell to 47.9 from 50.4 in May, turning into contraction territory, which also formed a new squeeze on the current corporate profit margins.
Wang Qing, chief macro analyst of Oriental Jincheng, told the 21st Century Business Herald that the current macroeconomic pattern of "strong supply and weak demand" will also restrict the momentum of price recovery in the second half of the year. It is expected that the CPI will continue to run at a low level below 1.0% year-on-year in the second half of the year, and it will be difficult for the PPI to rebound to positive year-on-year in the third quarter.
For the follow-up trend, Wang Qing believes that the manufacturing PMI index in July is likely to continue to be in the contraction range, but the contraction will be moderated. Recently, the issuance of government bonds has accelerated significantly, large-scale equipment renewal and durable consumer goods trade-in measures are being implemented, coupled with the promotion of the development of new productive forces and the comprehensive promotion of the "three major projects", manufacturing investment and infrastructure investment will maintain a rapid growth level, which will have a certain role in stimulating both ends of supply and demand in the manufacturing industry. However, it is necessary to pay close attention to the impact of the real estate industry on the overall manufacturing boom level.
Zhang Liqun, a special analyst of the China Federation of Logistics and Purchasing, pointed out that the current is in the critical stage of promoting the comprehensive economic rebound against the current, we must fully understand the seriousness of the market-guided demand contraction and its self-acceleration mechanism, we must significantly increase the counter-cyclical adjustment of macroeconomic policies, significantly increase the role of government investment in enterprise orders, drive the production and investment of enterprises to continue to be active, the employment situation continues to improve, and accelerate the demand contraction to demand expansion.
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