China's manufacturing industry is in trouble: PMI for five consecutive months is lower than the line of honor
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Recently, the National Bureau of Statistics released data showing that the manufacturing PMI in December 2015 was 49.7%, of which the consumer goods manufacturing industry grew steadily, especially in the industries of automobile manufacturing, agricultural and sideline food processing, food and wine and refined tea, which continued to expand rapidly. In the situation, the PMI is in the higher range of 55.0%. The index of non-manufacturing business activities continued to rise, the highest point since 2015, and the expansion momentum was relatively strong. In particular, the financial activity index of banking, securities, insurance and other financial industries was at a high level of more than 60% for two consecutive months. A strong expansion trend.
Analysts pointed out that in December 2015, the manufacturing, service and construction PMI rebounded, with the industrial value added exceeding expectations in November 2015, the total retail sales of social consumer goods hit a 10-month high and the price of 100 cities rose by 8 The month shows that the Chinese economy is stabilizing and recovering. However, Li Huiyong, the chief macro analyst of Shen Wan Hongyuan, is not so optimistic. “The data is in line with expectations and continues to pick up momentum. However, it may be difficult to continue this trend,†he said. “It still needs more policy easing measures to stabilize. , including double down, more bottoming policies, etc."
Manufacturing PMI is lower than the line of glory
Statistics show that in December 2015, the manufacturing PMI was 49.7%, which was 0.1 percentage points higher than that in November 2015, and it fluctuated within a narrow range below the critical point in the near future. However, Zhao Qinghe, senior statistician of the Service Industry Research Center of the National Bureau of Statistics, said that although the PMI rebounded slightly last month, it was still below the critical point and lower than the historical level. He believes that both the supply side and the demand side rebounded and the consumer demand continued to release. The steady growth of the consumer goods manufacturing industry led to a slight increase in the index. However, the recent crude oil price fell to the lowest point in many years. The industrial producers' ex-factory price index and the raw material purchase price index continued. The decline was more pronounced at the end of the year, and the production and operation of related industries were affected. The downward pressure on the manufacturing industry remained large.
The financial industry is at a high level
Although the manufacturing PMI is still below the historical level, the non-manufacturing PMI is the highest since last year. In December 2015, China's non-manufacturing business activity index was 54.4%, up 0.8 percentage points from the previous month, rising for two consecutive months, and the expansion momentum was relatively strong.
In terms of industries, the overall trend of the service industry is stable. The business activity index was 53.7%, up 0.9 percentage points from the previous month, higher than the annual average of 1.0 percentage points, and rebounded for two consecutive months. Affected by factors such as festivals and year-end promotions, the service industry related to household consumption is relatively active. The business activity indexes of telecommunications Internet software, retail, postal express, warehousing and distribution industries are all located in a higher economic range, and the business volume is faster. increase. The business activity index of banking, securities, insurance and other financial industries has been at a high level of more than 60% for two consecutive months, showing a strong expansion trend.
Data interpretation
The rebound in demand led to an increase in production growth, which pushed China's official manufacturing PMI to rebound slightly in December. Zhao Qinghe said, "Overall, non-manufacturing business activities, market demand, prices and employment activities have rebounded, laying a good foundation for the economic start next year," said Cai Jin, vice president of the Federation of Logistics and Purchasing. Although the rebound of the industry has certain holiday factors, it is more reflected in the inherent requirements of the accelerated development of the service industry along with the economic transformation."
Li Huiyong, chief macro analyst of Shen Wan Hongyuan, also pointed out that from the perspective of foreign environment, it is still in the context of the Fed rate hike cycle, the global economic turmoil, confidence is not stable. On the domestic front, China proposes that the supply-side reform is of course beneficial in the medium and long term, but it also creates certain uncertainty in the short term and may bring some negative impacts. "The data is in line with expectations and continues the momentum of economic recovery in November, but it is difficult to continue this trend. The economy is still unstable or weak, and more policy easing measures are needed to maintain stability, including double downs and more support. Bottom policy, etc."
Zhongjin pointed out that the employment classification index declined slightly, indicating that the government may increase spending to protect industrial employment opportunities. With some overcapacity industries such as steel and coal closing more factories, employment conditions may remain severe, requiring fiscal policy to play a more important role.
Some experts said that the growth momentum has stabilized, but as the manufacturing index is below 50 for five consecutive months, the manufacturing industry is still facing difficulties; monetary policy will continue to be adaptive, and fiscal policy will be more forward-looking.