China’s manufacturing purchasing managers’ index (PMI) stood at 49.3 percent in July, up 0.3 percentage points from the previous month, data from the National Bureau of Statistics showed on July 31. The non-manufacturing business activity index was 51.5%, down 1.7 percentage points from the previous month. The composite PMI output index was 51.1%, down 1.2 percentage points from the previous month. Zhao Qinghe, senior statistician of the service industry Survey center of the National Bureau of Statistics, pointed out that in July, the manufacturing purchasing managers’ index continued to rise, the non-manufacturing business activity index was still expanding, the comprehensive PMI output index continued to expand, and China’s economy continued to recover. Judging from market expectations, business confidence is generally stable.

The manufacturing PMI continues to pick up

From the perspective of 13 sub-indexes, compared with the previous month, the new orders index, the backlog of orders index, the finished goods inventory index, the purchase volume index, the purchase price index, the ex-factory price index, the raw material inventory index, the supplier delivery time index and the expected index of production and business activities increased by 0.1 to 7.4 percentage points; The production index, the new export orders index, the import index and the employment index declined, and the index fell by 0.1 to 0.2 percentage points.

Zhang Liqun, special analyst of the Federation of Logistics and Purchasing, believes that the PMI index continued to rise slightly in July, indicating that economic growth momentum has further accumulated and signs of recovery have emerged. The expected index of production and business activities, the purchasing volume index, and the inventory index of raw materials in the PMI all rose to varying degrees, indicating that business confidence has improved and production and business activities have signs of recovery.

3500/62-04-R0

Zhang Liqun pointed out that at the same time, it should be noted that the problem of insufficient demand is still prominent. Although the order index has recovered slightly, the proportion of enterprises reflecting lack of demand is still more than 60%. Subject to this restriction, the production of enterprises is still in a hovering state, and the production index fell slightly. We will further strengthen counter-cyclical regulation of macro policies, increase the role of government investment in driving social investment, accelerate the overall effect of policies to expand domestic demand, and remove the constraints of shrinking demand as soon as possible.

Wen Tao of the Logistics Information Center pointed out that the sub-index changes show that domestic market demand is picking up, enterprise production is running steadily, market prices are rising, the private economy is stabilizing, enterprise expectations are generally rising, and positive factors for economic recovery are increasing.

Wang Qing, chief macro analyst of Oriental Jincheng, pointed out that all kinds of macro policies will work in the direction of enhancing the momentum of economic recovery. Among them, bank credit will speed up, infrastructure investment is expected to maintain a relatively fast level, and the efforts of various departments to promote consumption will be significantly increased, especially the real estate support policy will be significantly increased. This will form a more obvious boost to both ends of the manufacturing supply and demand. The manufacturing PMI index is expected to rise to above 50% expansion territory in August and will continue in September.

Luo Huanjie, a senior researcher at the macro research Institute of Zhixin Investment Research Institute, told Shell Finance that looking forward to August, with the continued recovery of both sides of supply and demand and the implementation of supportive policies, the manufacturing PMI is expected to turn from a decline to an increase.