According to the China Purchasing Managers' Index (PMI) released by the Service Industry Survey Center of the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing, the PMI for manufacturing, non-manufacturing business activity and composite PMI output in February were 50.6%, 51.4% and 51.6% respectively, down 0.7, 1.0 and 1.2 percentage points from the previous month.China's manufacturing PMI has stayed above the demarcation line between expansion and contraction for 12 consecutive months, indicating the country's overall economic expansion continues, said Zhao Qinghe, a senior statistician at the service industry survey center of the National Bureau of Statistics.
The economy has a strong internal driving force
The manufacturing PMI stayed above the line between expansion and contraction in February for the 12th consecutive month.Among the sub-indexes, the expected index of enterprise production and business activity rose to 59.2%, 1.3 percentage points higher than the previous month.The production index fell 1.6 percentage points from the previous month to 51.9 percent, higher than in previous years.
Beijing university, director of the national economy research center, professor Su Jian in an interview with the China sankei shimbun reporters, said in February China's manufacturing purchasing managers' index, the index of non-manufacturing business activities were 50.6% and 51.4% respectively, compared with last month's fall, it can be seen that both manufacturing and non-manufacturing pace of expansion in slow, affected by the lunar New Year holiday, manufacturing activity fell, led to countless expansion efforts are reduced, a short-term volatility is normal.In addition, considering that China's economy is still making up for the gap caused by the impact of the epidemic, the economy has a strong endogenous impetus, and the seasonal impact caused by the Spring Festival holiday will soon disappear, and the expected positive endogenous impetus still exists in the future.
Meanwhile, Pang Chaoran, an associate researcher at the Academy of International Trade and Economic Cooperation of the Ministry of Commerce, told China Sanjing News that historically, the effect of the Spring Festival holiday has disturbed the PMI data, which can be seen in the structural PMI data for the service sector.The retail, dining and entertainment PMI readings, which are related to holiday spending, were higher than last month, while the construction PMI was lower.Secondly, there are obvious changes in price. The purchase price index is at a high level of 66.7%, which may exert a certain influence on future inflation.Import and export prosperity has declined, but enterprises expect better, has not had a significant impact on the actual trade.
Zhang Liqun, a macroeconomic researcher at the Research Centre of the State Council, said, "The PMI index continued to decline in February, but it remained on the line between expansion and contraction, indicating that China's economy continues to maintain a steady recovery.In the PMI index, the expected index of future production and operation increased, indicating that enterprises are optimistic about future market expectations, indicating that production will recover well after the Spring Festival."
Wen Tao, an analyst from China Logistics Information Center, said that the Spring Festival factors have led to a normal slowdown in the production growth of enterprises, but local governments have actively implemented the "local Spring Festival" measures, which will help enterprises stabilize production and quickly resume work.Although the supply and demand indexes slowed down somewhat, they remained at a good level of 51.5% or above, indicating that the momentum of steady economic recovery remained unchanged.
In the view of Zheng Houcheng, director of Yingda Securities Research Institute, the center of manufacturing PMI and non-manufacturing PMI is expected to move up from March to December as the start of the construction season after the Spring Festival, the climate warming and the smooth progress of vaccination at home and abroad.
Overall, the economy continues to improve
As for the main reasons for the manufacturing and non-manufacturing PMIs to remain above the expansion and contraction line for 12 months in a row, Su Jian believes that on the one hand, the country's coordinated prevention and control of the epidemic and economic and social development have made continuous progress, enterprises have resumed work and production quickly, and the economic operation has maintained a steady recovery.On the other hand, driven by the high-end development of the manufacturing industry brought about by new drivers, the optimism of exports brought about by the favorable foreign trade situation, and the gradual recovery of consumption and the service industry as the epidemic eased, the overall economy continued to improve and the expansion continued.
According to Pang Chaoran, the domestic enterprises that were the first to get the epidemic under control have resumed production and work in good condition, the consumer market has been effectively recovered, and the overall economy has shown a state of expansion, which has promoted the PMI to stay above the line between expansion and contraction for 12 consecutive months.It is worth noting that the business activity expectation index is obviously at a high level and diverges from the PMI index, indicating that enterprises generally have sufficient confidence in the future market.
As for the future trend of manufacturing and non-manufacturing PMI, Su Jian said that the future trend of both manufacturing and non-manufacturing remains optimistic.In February, in the sub-index of manufacturing PMI, the production index and new order index were 51.9% and 51.5% respectively, both above the critical level, indicating that the production and demand of the manufacturing industry were still in the state of expansion. Influened by the policy of "local Spring Festival", the process of resuming work and production after the Spring Festival was accelerated, which contributed to the improvement of the manufacturing industry.In the non-manufacturing PMI, the business activity expectation index is 64%, located in the high boom range. It can be seen that non-manufacturing enterprises remain optimistic about the industry recovery, which is conducive to the further expansion and development of production and operation of enterprises.
"In the short term, the main focus is on demand. Manufacturing orders are slightly weaker than non-manufacturing orders.In general, with stable macro policies, sustained development of the domestic market and gradual upgrading of household consumption, both will show sustained and healthy development for some time to come."Pang Chaoran further said.
Notably, data showed that the PMI for the services sector was 50.8 per cent in February, down from 0.3 percentage points in the previous month, still above the critical point indicating that the sector continued to expand, but at a narrower pace.
At the same time, the business activity indexes of retail, catering, entertainment and other industries, which are closely related to consumer consumption, are all in the expansion range and higher than January, indicating relatively active business activities in these industries.The business activity index of telecommunications, radio, television and satellite transmission services, money and financial services was higher than 58.0%, and business volume maintained rapid growth.
"We can see from the changes in industry data that the non-manufacturing industry grew steadily as the demand for related services picked up, driven by holiday consumption.""Said Wu Wei, an analyst with China Logistics Information Center.
Taking the retail and catering industry as an example, according to the Ministry of Commerce monitoring, the sales of key retail and catering enterprises nationwide reached about 821 billion yuan on February 11 and 17, up 28.7 percent from the 2020 Spring Festival holiday and 4.9 percent from the 2019 Spring Festival holiday.
Wu Wei said that after the Spring Festival, enterprises' production and operation will return to normal, which will lead to a significant rebound in production-related services such as wholesale and finance, and services such as accommodation and entertainment are also expected to speed up the recovery.
He stressed: "Influenced by the Spring Festival, the non-manufacturing sector showed the characteristics of off-season correction in February, but it did not change the long-term trend of stable recovery in the non-manufacturing sector.On the premise of maintaining sustained and stable policies, macro-control should strengthen the cultivation of endogenous driving forces for economic growth through strategies such as expanding domestic demand and innovation-driven growth."
