In October, Caixin'S Manufacturing PMI Rose To 53.6, The Highest Since February 2011

Since February 2011, China's manufacturing industry continued to improve, with a pick-up of 53.0% compared with the domestic and foreign manufacturing sector's manufacturing economy.

This trend is not consistent with the Bureau of statistics manufacturing PMI. The PMI of manufacturing industry in October, released by the National Bureau of statistics, was 51.4, down 0.1 percentage point from September.

Since the beginning of December, the manufacturing orders continued to rise sharply from the beginning of 2010. Although foreign demand has been in the expansion range for three consecutive months, the expansion rate has slowed down significantly, which indicates that the repeated overseas epidemic situation has significantly inhibited the external demand. Some enterprises reported that the epidemic situation and infection rate in the export market increased, which inhibited the growth of new export orders.

Strong demand accelerated the recovery of production. The production index was in the expansion range for eight consecutive months, and rose slightly compared with September.

In September, the pressure on the enterprise's order backlog continued to increase, which was almost the same as that of the new business. However, enterprises are still cautious about increasing employment. The employment index has been in the expansion range for two consecutive months, but it is still slightly higher than 50, indicating that although the market has recovered well, a large number of enterprises have not increased the number of employees temporarily for the sake of cost control.

In order to meet the growth of production and operation demand, manufacturers increase procurement accordingly. In October, the manufacturing purchasing volume index and raw material inventory index continued to expand, recording the second highest in more than seven years and the highest in more than a decade, respectively. Due to the supply of finished products, the supply time of finished products decreased slightly.

In October, the purchase price and ex factory price of manufacturing enterprises continued to increase slightly. However, the growth rate of the former slowed down while that of the latter increased slightly, which means that the profit margin of enterprises has improved. The enterprises interviewed generally said that the strong demand has increased the willingness to raise prices.

The enterprise confidence index rose sharply to the highest level since September 2014. Nearly one third of entrepreneurs believed that the business situation of enterprises would be further improved in the coming year, and the respondents were full of confidence in the effect of epidemic prevention and control and the sustained economic recovery.

Wang Zhe, a senior economist at Caixin think tank, said that with the domestic epidemic situation stabilizing, economic recovery is still the main line of the current macro-economy, and the economic recovery will continue for several months, which is a high probability event. However, at the same time, there are still many uncertain factors in the external environment. The repeated outbreaks of overseas epidemics still restrain exports. The complete recovery of employment also depends on the establishment of stronger and more lasting confidence. The normalization of monetary and fiscal policies in the post epidemic period needs to be cautious.