• China Manufacturing PMI for January was 55.1%, a slight increase of 0.3 percentage points from December last year.
• Output, New Orders, Purchases of Inputs Indices maintained at a relatively high level, reaching approximately 60%.
• Imports Index saw a marked increase to 55%; Input Prices Index fell, but continued to stay above 55%.
According to the China Federation of Logistics and Purchasing (CFLP), the China Manufacturing PMI in January 2007 was 55.1%, a slight increase of 0.3 percentage points from the previous month. The PMI has been staying above 50% since January 2005.
Among the component indices of the month’s PMI, Output, New Orders and Purchases of Inputs Indices continued to maintain at relatively high levels of approximately 60%. Stocks of Finished Goods, Input Prices and Employment Indices fell, while the remaining indices saw marginal increases. Gains for Purchases of Inputs index and Imports Index, in particular, were more significant, the magnitude of their increase being more than 2 percentage points. Imports Index rose to 55%, the highest level in the recent 9 months. Input Prices Index fell, but remained at above 55%.
According to Zhang Liqun, our contributing analyst, “the January PMI reflects that the Chinese economy is robust yet stable. According to key economic data of China recently released by the National Bureau of Statistics, despite some fluctuations in 2006, China's economy has trended to a high level and has been stable. The 2006 PMI trend basically reflects the same characteristics (refer to the above diagram). Naturally, as a monthly indicator, its magnitude of fluctuation tends to be larger; however, the general trend shows a robust yet stable economy at a high level. The January PMI is a continuation of this trend, and the same characteristics is expected to prevail for some time to come. Further observation is required as to the possible economic policy changes due to the current stock and property market fever and their potential impact on economic activities and the PMI ."
Among the 20 industries, only “Smelting of Non-ferrous Metals”, “Communication, IT & Electronics Equipment” and “Textile” were the 3 industries whose indices were lower than 50%. Of the remaining 17 industries which recorded indices higher than 50%, “Beverage”, “Tobacco”, “Electrical Machinery & Equipment” and “Wood Processing & Furniture” were 4 industries with indices greater than 60%, within which the index of “Wood Processing & Furniture” has been staying above 60% for 5 consecutive months. Based on the registration status of enterprises, the indices for State-owned Enterprises, Limited Liability Corporations, Shareholding Corporations Ltd were higher, at greater than 55%. The index for Foreign-invested Enterprises was slightly lower, at 52.7%. By region, the indices for the Eastern and Western regions were close, at higher than 57%; the Central Region was slightly lower, at 53%. Based on the three major economic zones, the indices for the Yangtze River Delta and Bohai Sea region were higher, both greater than 55%; the Pearl River Delta was somewhat lower, being slightly above 50%. By End-use category, “Producer goods” and “Consumer goods” were higher, at above 56%; those of “Intermediate goods” and “Raw materials & energy” were slightly lower, being 53.7% and 52.4% respectively.
Output Index
Output Index for January 2007 was 60.3%, climbing 1.1 percentage points from the previous month. Among the 20 industries, only the indices of 2 industries, namely “Smelting of Non-ferrous Metals” and “Communications, IT & Electronics Equipment” were lower than 50%. Of the 18 industries whose indices were higher than 50%, 11 industries were higher than 60%, within which, the indices of “Beverage”, “Tobacco”, “Wood Processing & Furniture” and “Electrical Machinery & Equipment” exceeded 70%. By region, the indices of the Eastern and Western regions were higher, at approximately 61%; the Central region was a little lower, at 57.3%. Based on the three economic zones, the index for the Yangtze River Delta and Bohai Sea region were higher, being above 61%; whereas that of Pearl River Delta was the lowest, at 51.4%. By End-use category, the indices for “Consumer goods”, “Producer goods” and “Intermediate goods” performed better, at between 58.6% and 62.8%; the index of “Raw materials & energy” was lower, at 56.3%.
New Orders Index
The New Orders Index of January 2007 was 59.6%, rising 0.7 percentage points from the previous month, and has stayed above 55% for 6 consecutive months. Among the 20 industries, “Oil Refining & Coking” and “Non-metal Minerals” were 2 industries whose indices were at the 50% critical level. The industries with indices lower than 50% were “Textile” and “Smelting of Non-ferrous Metals”. Among the 16 industries which saw indices higher than 50%, 11 exceed 60%, and within which, 3 industries, namely “Beverage”, “Tobacco” and “Wood Processing & Furniture” recorded indices higher than 70%. By region, the Eastern and Western regions were higher, at 61.1% and 59.9% respectively; the index of the Central region was lower, at 55.6%. Based on the three economic zones, the Yangtze River Delta and Bohai Sea region did better, with indices above 60%; the index for the Pearl River Delta was lower, at 51.4%. By End-use category, the categories that did better were “Consumer goods” and “Producer goods”, being 64.6% and 59.6% respectively, whereas indices for “Intermediate goods” and “Raw materials & energy” were lower, at 55.8% and 54.1% respectively.
New Export Orders Index
The New Export Orders Index of January 2007 was 55.2%, edging up 0.2 percentage points from the previous month, having stayed above the 55%-level for 11 months in a row. Among the 20 industries, 14 industries saw their indices higher than 50%, within which 8 were higher than 60%. In particular, “Beverage” was the highest, at 70%. “Tobacco” just made it to the 50% critical level, whereas 5 industries, namely “Communications, IT & Electronics Equipment”, “Smelting of Non-ferrous Metals”, “Textile”, “Chemical Fibre, Rubber & Plastics” and “Smelting of Ferrous Metals” saw indices lower than 50%. By region, the indices of the Eastern and Central regions were higher, at 56.3%, whereas that of the Western Region was lower than 50%. Based on the three economic zones, the index for the Bohai Sea region was the highest, at 61.2%, followed by the Yangtze River Delta, at 55.9%; the lowest was the Pearl River Delta, being under 50%. By End-use category, the index for “Producer goods” was the highest, at nearly 65%, followed by “Consumer goods”, at 57.2%; the index for “Intermediate goods” was slightly above 50%, while that of “Raw materials & energy was at the 50% critical level.
Backlog of Orders Index
The Backlog of Orders Index for January 2007 was 52.0%, rising 1.7 percentage points from the previous month, the highest in the most recent 4 months. Among the 20 industries, 10 recorded indices higher than 50%, within which, the indices of 4 industries, namely “Beverage”, “Electrical Machinery & Equipment”, “Metal Products” and “Tobacco” reached the 60% level, with “Beverage” being the highest, at 71.9%. The 4 industries whose indices were at the 50% critical level were “Garment, Footwear & Related Products”, “Wood Processing & Furniture”, “Smelting of Ferrous Metals” and “General Machinery”; indices of the remaining 6 industries were lower than 50%. By region, the Eastern and Western regions saw their indices higher than 50%, whereas that of the Central Region was under 50%. Based on the three economic zones, the Bohai Sea region performed best, with an index of 55.6%; next was the Yangtze river Delta, at 52.9%; the lowest was the Pearl River Delta, at lower than 50%. By End-use category, the indices of “Intermediate goods”, “Consumer goods” and “Producer goods” were greater than 50%, at between 51.1% and 54.2%, whereas the index for “Raw materials & energy” was lower than 50%.
Stocks of Finished Goods Index
The Stocks of Finished Goods Index for January 2007 was 45.5%, losing 1 percentage point from the previous month. This index has been staying under the 50% level since January 2005. By industry, 4 of the 20 industries, namely “Non-metal Minerals”, “Electrical Machinery & Equipment”, “Chemical Fibre, Rubber & Plastics” and “Beverage” registered higher-than-50% indices, while those of 3 industries, being “Papermaking, Printing, Stationeries & Sporting goods”, “Metal Products” and “Specialised Machinery” were at the 50% critical level. The indices of the remaining 13 industries were significantly lower than 50%; in particular “Wood Processing & Furniture”, “Smelting of Non-ferrous Metals”, “Garment, Footwear & Related Products” and “Oil Refining & Coking” were 4 industries whose indices were the lowest, being lower than 40%. By region, the Central region fared the worst, at 40.6%; next was the Western region, at 41.1%; the Eastern Region was the highest, at 48.3%. Based on the three economic zones, there was little difference between the indices, all falling between 47.3% and 49.2%. By End-use category, the index for “Consumer goods” was the lowest, at 43.3%, followed by “Raw materials & energy” and “Producer goods”, being 46.2% and 46.6% respectively; “Intermediate goods” had the highest index of 48%.
Purchases of Inputs Index
The Purchases of Inputs Index for January 2007 was 59.7%, gaining 2.8 percentage points from the previous month. 17 among the 20 industries saw their indices higher than 50%, within which, 11 recorded indices greater than 60%, and of which, the 4 leaders whose indices were higher than 70% were “Tobacco”, “Wood Processing & Furniture”, “Beverage” and “General Machinery”. The index of “Oil Refining & Coking” was at the 50% critical level, while those of “Communications, IT & Electronics Equipment” and “Textile” were lower than 50%. By region, the Eastern and Western regions did better, their indices being higher than 60%, whereas the Central region’s was slightly lower, at 57.3%. Based on the three economic zones, the Yangtze River Delta had the highest index of 62.7%, followed by the Bohai Sea region, at 59.1%; the index for the Pearl River Delta was slightly lower, at 53.7%. By end-use category, the indices for “Consumer goods” and “Producer goods” were the highest, at above 60%, while those of “Raw materials & energy” and “Intermediate goods” were slightly lower, at 58.2% and 55.5% respectively.
Imports Index
Imports Index for January 2007 was 55.0%, climbing 2.6 percentage points over the previous month, the highest in the recent 9 months. Among the 20 industries, 17 saw their indices higher than 50%, within which, 5 industries, namely “Non-metal Minerals”, “Metal Products”, “Beverage”, “Electrical Machinery & Equipment” and “Wood Processing & Furniture” recorded indices that were higher than 60%. The index for “Pharmaceutical” was at the 50% critical level. The indices of 2 industries, being “Textile” and “Smelting of Non-ferrous Metals” were lower than 50%. By region, the indices of the Eastern and Western regions were higher, at 56.1% and 56.8% respectively; the Central Region’s index was lower, at 50.8%. Based on the three economic zones, the Bohai Sea region and Yangtze River Delta did better, with indices at 58.6% and 57.3%; the index of the Pearl River Delta was lower, at 47.5%. By end-use category, the indices of “Producer goods” and “Raw materials and energy” were higher, at above 55%, whereas those of “Consumer goods” and “Intermediate goods” were slightly lower, at 54.4% and 54% respectively.
Input Prices Index
The Input Prices Index for January 2007 fell by 2.1 percentage points to 55.4%. 15 of the 20 industries recorded indices higher than 50%, within which, 6 industries saw indices higher than 60%, with the indices of “Smelting of Ferrous Metals” and “Metal Products” surpassing 70%. “The indices of 5 industries, namely “Electrical Machinery & Equipment”, “Communication, IT & Electronics Equipment”, “Oil Refining & Coking”, “General Machinery” and “Transport Equipment” were lower than 50%. By region, the indices of the Western, Central and Eastern regions, ranked in descending order, were 58.3%, 57.1% and 54.2% respectively. Based on the three economic zones, the Bohai Sea region was the highest, with 56.4%, followed by the Pearl River Delta, at 53.8%; the lowest being the Yangtze River Delta, at 50.9%. By end-use category, the indices of “Raw materials & energy” was the highest, exceeding 60%, while those of “intermediate goods”, “Consumer goods” and “Producer goods” were 56.4%, 53.7% and 52.4% respectively.
Stocks of Major Inputs Index
The Stocks of Major Inputs Index for January 2007 rose 1.1 percentage points to 50.6%, breaking the 50% mark for the first time in 4 months. By industry, the indices of 11 of the 20 industries were higher than 50%, with those of the leaders, i.e. “Smelting of Ferrous Metals” and “Tobacco”, being higher than 60%. The indices of 3 industries, namely “Beverage”, “Chemicals” and “Chemical Fibre, Rubber & Plastics” were at the 50% critical level. 6 industries saw their indices lower than 50%, the lowest being “Communications, IT & Electronics Equipment”, at lower than 40%. By region, the highest was the Western region, at 52.6%; the indices for the Central and Eastern regions were close, at 50.4% and 50.2% respectively. Based on the three economic zones, the index of the Yangtze River Delta was higher than 50%, while those of the Pearl River Delta and the Bohai Sea region were lower than 50%. By End-use category, the index for “Consumer goods” was lower than 50%, whereas the remaining three categories saw their indices at higher than 50%, falling between 51.3% and 52.5%.
Employment Index
The Employment Index for January 2007 was 50.1%, having lost 0.9 percentage points from the previous month. Among the 20 industries, the indices of 8 industries were higher than 50%, with that of “Beverage” reaching above 60%; that of “Smelting of Non-ferrous Metals” was at the 50% critical level, whereas the indices of the remaining 11 industries were lower than 50%. By region, the Eastern region saw its index slightly higher than 50%, while those of the Central and Western regions were lower than 50%. Based on the three economic zones, the indices of the Yangtze River Delta and the Pearl River Delta were at the 50% critical level, while that of the Bohai Sea region was slightly higher, at 51.4%. By end-use category, “Consumer goods” and “Producer goods” saw their indices rising above the 50% level, being 51.4% and 50.5% respectively; “Intermediate goods” was at the 50% critical level, while that of “Raw materials & energy” was lower than 50%.
Suppliers’ Delivery Time Index
The Suppliers’ Delivery Time Index for January was 52.6%, having gained 0.6 percentage points from the previous month, making it the highest in 4 months. By industry, among the 20 industries, the indices of 18 industries were higher than 50%, the 4 leading industries being “Pharmaceutical”, “Beverage”, “Food” and “Metal Products”, which saw their indices rising above 55%. The indices of 2 industries, being “Smelting of Non-ferrous Metals” and “Smelting of Ferrous Metals”, were lower than 50%. By region, the Eastern and Central regions were higher, at 53%, while that of the Western region was slightly above 50%. Based on the three economic zones, the indices were all higher than 50%, falling between 51.6% and 53.7%. By End-use category, the indices for “Consumer goods” and “Intermediate goods” were higher, at 54.8% and 52.1%; the indices of the remaining two categories were close, with both being slightly above 50%.
Products in short supply:
Coal, electric power, copper products, liquid alkali, wood pulp, tobacco, semi-conductor devices etc.
Products with rising prices:
Coal, coke, steel products, pig iron, stainless steel, iron ore, copper, aluminium, tin, crude oil, liquid alkali, corn, starch, cotton, tobacco, timber.
Products with declining prices
Copper, copper products, crude oil, methanol, sulphuric acid, heavy oil, polyester, polypropylene, PVC, methylbenzene, lysine, hydrogen peroxide, liquid ammonia, sugar etc.
Products whose prices have been reported rising by some companies and declining by others:
Copper, crude oil.
