In December 2019, Caixin China Manufacturing PMI Recorded A 51.5 Drop Of 0.3 Percentage Points.

In January 2nd, Caixin China's Manufacturing Purchasing Managers Index (PMI), released in December 2019, recorded a 51.5 decline, a slight decline of 0.3 percentage points, ending a five consecutive month of recovery, but still significantly higher than the first three quarters of 2019.

This trend is not consistent with the PMI of the National Bureau of statistics. In December 2019, the National Bureau of Statistics announced 50.2 of the manufacturing industry PMI, unchanged from last month.

In December 2019, the new orders index fell to the lowest level in three months, and the new export orders index also declined slightly. The manufacturers surveyed showed improvement in demand both at home and abroad.

The increase of new orders LED manufacturers to expand production, and the output of manufacturing industry increased further. Although the output index dropped slightly for two consecutive months, it remained at a high level for six consecutive months.

The number of employment in China's manufacturing industry is flat, and the employment index has dropped to a low level. Many manufacturers have taken measures such as cost control and efficiency improvement.

The increase in output has driven manufacturers to increase procurement, and the purchasing inventory index has been expanding for four consecutive months, and the growth rate is still moderate. Finished product inventory also ended two consecutive months of decline, finished goods inventory index significantly rebounded to the upper and lower boundaries. Some manufacturers said that the expansion of finished goods inventory is related to the expected improvement in the next few months.

The average input cost increased further in December 2019, but the increase was small, far below the long-term average. Manufacturers generally say that rising costs are related to rising prices of raw materials and rising pay. The rise in costs has led manufacturers to raise factory prices, rising for the first time since July 2019, but with a smaller price increase.

China's manufacturing industry generally expects output to continue to rise in the next 12 months, with a slight rebound in optimism. However, the overall optimism of the industry is still weaker than the historical level due to the uncertainty of Sino US trade frictions, tightening of environmental policies and fierce competition in the market.

Zhong Zhengsheng, chairman and chief economist of the new financial think-tank, said that China's economy continued to stabilize in December 2019. Although demand expansion was not as strong as in the first two months, entrepreneurs' confidence began to show some positive changes, and the willingness to expand production and increase inventories increased, which also had a positive impact on employment. With the positive signals from the first stage agreement between China and the United States, corporate confidence has room to repair and help consolidate the foundation for economic stabilization.