Purchasing Managers' Index (PMI) is a "physical checklist" that measures a country's manufacturing industry. It is a measure of manufacturing manufacturing, new orders, commodity prices, inventory, employees, order delivery, new export orders And imports in eight areas.
Purchasing Manager Index
PMI is a comprehensive
PMI is a comprehensive weighted index of five evolving indicators: new order indicators, production indicators, supplier delivery indicators, inventory indicators, and employment indicators. The weighted index is representative to a certain extent, showing the trend and degree of change. In this way, the results of each company's rise, decline and invariability in each aspect can be obtained. After calculating the proportion of enterprises with different results in each aspect, the diffusion index of these five aspects can be obtained.
Purchasing manager's index is expressed as a percentage, and 50% is often used as the demarcation point of economic strength: when the index is higher than 50%, it is interpreted as
China
The China Purchasing Managers Index is an internationally accepted macroeconomic monitoring system, covering production and distribution, manufacturing and non-manufacturing industries. It plays an important role in monitoring and forecasting national economic activities. Build china
Foreign PMI is divided into manufacturing and non-manufacturing. According to China's actual situation, we decided to implement manufacturing PMI first, and when conditions are ripe, then implement non-manufacturing PMI. The compilation of China's manufacturing purchasing manager index system is a pioneering work in China and a systematic project. During the establishment of the PMI, the following issues were addressed:
1. In line with international standards
As mentioned earlier, China's PMI needs to be in line with international standards in the design of indicators and questionnaires, survey methods and calculation methods, and refers to internationally accepted practices.
2. In line with China's national conditions
Most foreign PMI indexes are
2013 PMI data (unit:%)
month
manufacturing
Non-manufacturing
index
MoM
index
MoM
August 2013
51
0.7
53.9 [1]
The official Manufacturing Purchasing Managers Index (PMI) for May released by the National Bureau of Statistics of China and the China Federation of Logistics and Purchasing (CFLP) rose slightly from 50.6 in April to 50.8, which was higher than market expectations. The main driver of the modest rise in PMI was the production sub-index, which rose from 52.6 in April to 53.3 in May. Noting that the market had previously been rumored that the official PMI reading in May would be below 50, the stock market suffered a sell-off last Friday. However, it turned out to be a rumor based on an earlier HSBC China manufacturing PMI of 49.6 released in May.
Meaning of purchasing manager index
Some key implications of the May official PMI reading of 50.8 released on June 1 are as follows.
First, the market's worries about further slowing economic growth will ease, and we expect the market to respond positively next Monday.
Secondly, as the PMI measures the change from the previous month, the official PMI readings rose modestly from the monthly average of 50.5 in the first quarter of 2013 to 50.6 in April and 50.8 in May. We expect that even if China no longer strengthens its economic stimulus, The second quarter to fourth quarter of 2013's economic growth rate will pick up from 1.6% in the first quarter to 1.9% -2.0%.
Third, given that the PMI readings of 50.8 in May and 50.6 in April are not very strong, it is quite certain that the quarter-on-quarter growth rate of gross domestic product (GDP) from the second quarter to the fourth quarter of 2013 will be maintained. In the narrow range of 7.5% -7.7% (compared to the year-on-year growth rate of GDP in the first quarter of 2013 was 7.7%, while the year-on-year GDP growth rate in the past two years is expected to be 7.6%). In this regard, we expect that our competitors on Wall Street will further revise their respective expectations for China's economic growth.
Fourth, given that the PMI reading is still above 50, and the economic growth rate is expected to pick up, we do not expect the new government to increase economic stimulus because they know that China's potential economic growth is slowing down and hope to increase Focus on structural reforms. More specifically, we do not expect the People's Bank of China to reduce interest rates and bank reserve requirements (RRR). We do not expect the yuan to depreciate against the US dollar, but its pace of appreciation will be restrained.
Purchasing Managers Index Details
The May new orders index rose to 51.8 from 51.7 in April, while the new export orders index rose to 49.4 from 48.6 in April. This indicates that external demand strengthened in May, but domestic demand may soften slightly. This is the new order index for the eighth consecutive month above the 50-day decline (the dividing line between economic expansion and contraction) after the reading has been below 50 for five consecutive months.
The May production index rose slightly to 53.3 from 52.6 in April, while the finished goods inventory index rose to 48.6 in May from 47.7 in April. Considering the disappointing demand situation in the first quarter of 2013, major manufacturing companies chose to actively reduce the inventory level of finished products in April. But corporate sentiment appears to have improved in May as demand conditions improved and the government implemented monetary easing measures.
The raw material inventory index for May rose slightly to 47.6 from 47.5 in April. As global commodity prices continue to decline, we expect inventory may take longer to gradually increase, as purchasing managers may wait for prices to fall before purchasing raw materials.
The employment index for May fell slightly to 48.8 from 49.0 in April. The employment index has been below 50 since June 2012. The continuing deterioration of the employment situation may be due to the ongoing process of manufacturing automation, the decline of the labor force due to the aging population, and the continuous increase in the proportion of migrant workers who have turned to the service industry. But it may also indicate weak economic growth.
The purchase price index of main raw materials rose to 45.1 in May from 40.1 in April, which indicates that inflationary pressure is quite low. The new government has room to maintain relatively loose monetary and fiscal policies. [3]
