Manufacturing sentiment eased slightly

Steady recovery of the service sector

The manufacturing PMI came in at 48.8 percent in May, down 0.4 percentage points from the previous month, reflecting a slowdown in production activity, according to data released on May 31 by the China Federation of Logistics and Purchasing and the Service Industry Survey Center of the National Bureau of Statistics.

However, there were a number of positive factors in the PMI data, such as relatively stable employment and continued easing of corporate cost pressures. Data showed that the employment index in May was 48.4%, at a relatively normal level; The purchasing price index and the ex-factory price index were 40.8 percent and 41.6 percent, respectively, down 5.6 and 3.3 percentage points from April, the third consecutive month of decline.

The production and operation activity expectation index of most manufacturing industries is in the expansion range, and enterprises remain optimistic about the recent development of the industry. The expected index of railway, Marine, aerospace and electrical machinery equipment and other industries has been at 60% for five consecutive months.

Since the beginning of this year, the non-manufacturing business activity index has remained above 54 percent of the business zone, continuing to recover growth. The business activity index for the service sector was revised back by 1.3 percentage points to 53.8 percent in May, still up from 6.7 percentage points a year earlier.

National Bureau of Statistics service industry Survey center senior statistician Zhao Qinghe analysis, service industry continues to maintain a rapid recovery. From the perspective of industry, driven by the “May Day” holiday effect, tourism and offline consumption are more active. From the perspective of market expectation, the business activity expectation index is 60.1%, which has remained in the high economic zone since this year, and all the industries surveyed are located in the expansion zone, and the service enterprises are optimistic about the market recovery and development.

The replacement of old growth drivers with new ones was accelerated

Industry differentiation is obvious

The business climate of the manufacturing industry presents a certain degree of differentiation, and the transformation of old and new driving forces is accelerating.

Of the 21 manufacturing sectors surveyed by the NBS, 11 were in expansion territory in May. Among them, the PMI of equipment manufacturing, high-tech manufacturing and consumer goods were 50.4%, 50.5% and 50.8%, respectively, indicating that the business level has improved from that of April. The PMI for the basic raw materials sector was 45.8 percent, down 2.1 percentage points from April, and was the main factor contributing to the overall decline in the manufacturing PMI.

Wen Tao, an analyst at the China Logistics Information Center, said that from the trend of the index this year, the traditional basic raw material industry is in a continuous downward momentum, while the new drivers such as equipment manufacturing and high-tech manufacturing maintain a stable upward trend, and the transformation of the old drivers of the industrial structure is accelerating.

New drivers of the service sector are also growing. In May, the business activity indexes of telecommunications, radio, television and satellite transmission services, Internet software and information technology services were all in the high business zone above 60%, consistently higher than the overall level of the service sector.

Insufficient new market demand

Demand expansion policies need to be strengthened

Zhang Liqun, a special analyst at the China Federation of Logistics and Purchasing, said the manufacturing PMI continued to fall slightly below the expansion and contraction line in May, indicating that a full economic recovery is still gathering momentum. We will work hard to comprehensively strengthen all aspects of infrastructure development, significantly strengthen the role of government investment in driving overall investment, and continue to improve the effect of policies to expand domestic demand.

“Insufficient demand and weak internal momentum are impeding continued economic recovery.” Wen Bin, chief economist and director of the research institute at Minsheng Bank. The survey also showed that 58.8 percent of companies reported a lack of market demand, indicating that the problem of demand contraction is still serious.

In terms of how to boost demand, Wang Qing, chief macro analyst of Orient Jincheng, believes that the next policy should stabilize investment while further increasing the policy support to promote consumption.

Wen Tao believes that the next step needs to continue to implement the work of stabilizing growth, expanding domestic demand and stabilizing foreign trade, more efforts to promote the pro-enterprise policy, accelerate the construction of the national unified large market, in order to further release the potential of demand, enhance the vitality of the market economy, and support the steady recovery of small and medium-sized enterprises.

“Policies still need to be stepped up in a timely and appropriate manner. We should accelerate the pace of fiscal spending, appropriately expand the scale of policy-based financial instruments, and push ahead with lowering the required reserve ratio and interest rates at an appropriate time to give full play to the counter-cyclical role of traditional tools.” “Wen Bin said.