In November, Caixin'S Manufacturing PMI Rose To 54.9, A Decade High

After the outbreak in November, China's manufacturing industry continued to improve rapidly. Caixin's purchasing managers' index (PMI) for China's manufacturing sector in November, released on December 1, recorded 54.9, up from 1.3 percentage points in October and the highest since December 2010.

This trend is consistent with the Bureau of statistics manufacturing PMI. The manufacturing PMI in November, released by the National Bureau of statistics, was 52.1, up 0.7 percentage points from October and the highest since October 2017.

The pace of economic normalization accelerated, the recovery of manufacturing supply and demand accelerated simultaneously, and the production index and new order index both recorded their highest values in a decade. Enterprises generally reflected that the increase in production was due to the increase of new orders and the further repair of the impact caused by the epidemic at the beginning of the year.

In terms of external demand, although the improvement rate of new export orders was slightly less than that of domestic demand, it continued to expand for four consecutive months, and it was faster than that of last month. This is mainly because foreign production is limited by the uncertain epidemic situation, and the export orders of domestic enterprises have increased.

The strong growth of supply and demand is gradually transmitted to the employment market, boosting the employment index to be in the expansion range for three consecutive months. Although the expansion of employment was not as strong as supply and demand, the employment index in November was still the highest since June 2011. More and more enterprises surveyed began to increase employment in response to strong market demand.

In the face of rapid order growth, finished goods inventory, purchase volume and raw material inventory increased simultaneously. The corresponding three indexes recorded the highest values since March 2018, February 2011 and March 2010. The active market has also extended the supply time of suppliers. Survey sample enterprises generally said that the increase in inventory is due to improved sales, the overall market situation is stronger.

In November, the ex factory price index and the purchase price index of manufacturing enterprises rose simultaneously in the expansion range. According to the respondents, the sharp rise in raw material prices in the month was an important reason, especially for industrial metals. Strong demand and rising costs push up the factory price further.

On the output outlook for the coming year, enterprises remained strong and optimistic, but the degree of confidence slightly weakened compared with October. Once the global economic rebound is over, there will be optimism from companies and companies that are expected to expand.

Wang Zhe, a senior economist at Caixin think tank, said that in November, the overall recovery pace of the manufacturing industry continued to accelerate, supply and demand both sides improved simultaneously, employment improved significantly, and overseas demand continued to expand. In the face of strong market demand, manufacturing enterprises take the initiative to replenish inventory. They are optimistic about the economic prospects in the coming year, and the entrepreneur confidence index remains high. From the perspective of trend, it is expected that the economic recovery in the post epidemic era will continue for several months; at the same time, many uncertain factors still exist in the internal and external environment, and the gradual withdrawal of relevant loose policies during the epidemic period needs more stable design.