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Manufacturing PMI Rebounded More Than Expected, Economic Recovery Set Sail In The Second Half Of The Year

Aug 08, 2020

The July Caixin China Manufacturing Purchasing Managers Index (PMI) announced on August 3 recorded 52.8, an increase of 1.6 percentage points from June and the highest level since February 2011. This trend is basically consistent with the official manufacturing PMI. The manufacturing PMI recently announced by the National Bureau of Statistics recorded 51.1%, an increase of 0.2 percentage points from the previous month, and was in the expansion range for five consecutive months. The industry pointed out that the performance of the two manufacturing PMIs exceeded market expectations, and both production and demand continued to pick up. The economy started well in the second half of the year, which released a positive signal for continued economic recovery.

Data show that Caixin China’s manufacturing PMI recorded 52.8 in July, surpassing the 51.2 in June, and the manufacturing boom has further improved. At present, output has been expanding for five consecutive months, the highest growth rate in nine and a half years. The industry generally expects that output in the next 12 months will exceed current levels. The new business volume has grown steadily, setting the most significant growth rate since the beginning of 2011. A senior economist at the Caixin Think Tank said that Caixin China’s manufacturing industry continues to maintain its upward momentum, reflecting the continued expansion of the manufacturing industry and the continued recovery of economic prosperity after the new crown pneumonia epidemic.

The trend of Caixin Manufacturing PMI is basically the same as the official manufacturing PMI. The National Bureau of Statistics recently announced that the manufacturing PMI in July recorded 51.1%, continuing the trend of steady and rising last month. Among the 21 industries surveyed, 17 industries had PMI above the threshold, an increase of 3 from the previous month. , The scope of the economy has expanded. From the sub-indices, the production index, new order index and supplier delivery time index are all higher than the critical point, indicating that manufacturing production has continued to increase month-on-month, market demand has gradually recovered, and raw material suppliers' delivery time has continued to accelerate.

Zhao Qinghe, a senior statistician at the Service Industry Survey Center of the National Bureau of Statistics, said that in order to meet production needs, companies have increased their procurement efforts, and the procurement volume index has rebounded significantly. Demand is gradually picking up, and the new order index has rebounded for three consecutive months. With the gradual relaxation of isolation and blockade measures in major economies around the world to resume economic activities, and the implementation of a series of policies and measures to stabilize foreign trade introduced by my country, imports and exports of manufacturing industries have also picked up. Companies remain optimistic about the recent industry recovery.

The industry pointed out that the performance of the two manufacturing PMIs exceeded market expectations, which released a positive signal for the continued economic recovery in the second half of the year. With the faster implementation of policies such as expanding domestic demand, the Chinese economy is expected to continue to rebound.

It is worth mentioning that when the National Development and Reform Commission held a video conference on development and reform work in the first half of the year, it was emphasized that it is necessary to focus on work, focus on stabilizing economic operations, and implement policies and measures to expand domestic demand and promote the formation of a strong domestic market.

"In the second half of the year, as the impact of the domestic epidemic continues to weaken, macro policies are fully exerted, and market expectations continue to improve, the restrained consumption and investment demand will be released at an accelerated rate, and the economic recovery process will be significantly accelerated." Former deputy of the State Council Development Research Center Director Wang Yiming said in an interview with a reporter from "Economic Information Daily" a few days ago. (Reporter Ban Juanjuan)