• China Manufacturing PMI for September was 56.1%, up 2.1 percentage points from last month.
• Output, New Orders and Input Prices Indices were relatively high, at above 60%.
• Input Prices Index have been climbing during the past two months, reaching a level second to only May’s highest.
According to the China Federation of Logistics and Purchasing (CFLP), the China Manufacturing PMI in September 2007 was 56.1%, up 2.1 percentage points from the previous month. The PMI has stayed above 50% since January 2005.
Among all the components of China Manufacturing PMI for the month, only Stocks of Finished Goods and Stock of Major Inputs indices were lower than 50%. Among the remaining indices, Output, New Orders and Input Prices indices were the better performers, exceeding 60%. The pattern of change shows that, compared to the previous month, New Export Orders Index remained unchanged, Stocks of Major Inputs and Employment indices returned lower, while the remaining indices rose at varying degrees. Among the rising indices, Output and New Orders indices made the most significant gain of more than 4 percentage points.
According to Zhang Liqun, our contributing analyst, “the PMI trend in September has taken on the 2005 pattern, that is, picking up from July, and the cause of which requires a closer look. From the perspective of economic development, since 2005
Among the 20 industries, only “Oil Refining & Coking”, “Smelting of Non-ferrous Metals” reported PMIs lower than 50%. Among the remaining 18 industries with PMIs greater than 50%, “Tobacco”, “Pharmaceutical” and “Garment, Footwear & Related Products” saw their PMIs above 60%. Based on the registration status of enterprises, “Limited Liability Corporations” was the highest, at 57%; “State-owned Enterprises”, “Shareholding Corporations Ltd” and “Foreign-invested Enterprises” were close, at slightly higher than 55%. By region, the Eastern, Central and Western regions reported little difference in their indices, at between 55.9% and 56.6%. The three major economic zones had similar situation. By end-use category, “Consumer goods” and “Producer goods” were highest, at 58%; “Intermediate goods” were next, at 55.6%; “Raw materials & energy” was the lowest, at 51.5%.
Output Index
Output Index for September 2007 was 61.7%, 4.6 percentage points higher than the previous month. This was the second highest level since April this year. Among the 20 industries, only the indices of 3 industries were lower than 50%; these were “Smelting of Non-ferrous Metals”, “Oil Refining & Coking” and “Chemical Fibre, Rubber & Plastics”. Among the remaining 17 industries, 13 saw their indices surpassing 60%, the leaders being “Garment, Footwear & Related Products”, “Tobacco”, “Specialised Machinery” and “Pharmaceutical”, whose indices were greater than 70%. By region, the Eastern, Central and Western regions saw their indices above the 60% level, at between 61% and 62.2%. The indices for the three major economic zones were close, at between 61.4% and 63.7%. By end-use category, the indices for “Consumer goods” and “Producer goods” were higher, at 66.4% and 65.4% respectively; next was “Intermediate goods”, at 59.4%; “Raw materials & energy” were lowest, at 51.7%.
New Orders Index
The New Orders Index for September 2007 was 60.7%, 4.4 percentage points higher than the previous month, the highest in 5 months. Among the 20 industries, only the indices for “Oil Refining & Coking” and “Smelting of Non-ferrous Metals” were lower than 50%. Of the remaining 18 industries whose indices are higher than 50%, 10 saw their indices above 60%, the top two performers being “Tobacco” and “Pharmaceutical”, whose indices were more than 70%. Also, the index for “Garment, Footwear & Related Products” has stayed at a high of above 60% for 10 consecutive months. “Food” had returned to under 60% for the first time in the past 10 months. By region, the Central and Western regions were the highest, at 62.2%; the Eastern region was slightly lower, at 59.9%. Based on the three major economic regions, the Pearl River Delta and the Bohai Sea Rim region were higher, hovering at around 60%, being 61.6% and 59.9% respectively; the Yangtze River Delta was slightly lower, at 58.6%. By end-use category, “Intermediate goods”, “Consumer goods” and “Producer goods” all returned above 60%, at between 60.7% and 63.2%; “Raw materials & energy” was the lowest, at 53.3%.
New Export Orders Index
The New Export Orders Index for September 2007 was 55.1%, dipping slightly but at more or less the same level as the previous month. Among the 20 industries, 14 had indices greater than 50%, within which, “Communications, IT & Electronic Equipment”, “General Machinery”, and “Beverage” were among the 6 industries returning with indices above the 60% level. “General Machinery” had stayed above the 60% level for 8 consecutive months. “Papermaking, Printing, Stationery & Sporting goods”, “Textiles” and “Smelting of Ferrous Metals” were among the 6 industries returning with indices under the 50% level, the lowest being “Oil Refining & Coking” and “Smelting of Non-ferrous Metals”, at below 40%. By region, the Eastern Region did best, at 55.7%, followed by the Central region, at 54.6%; the Western Region was the lowest, at 52.6%. Based on the three major economic regions, the Pearl River Delta was the highest, at 62.3%; indices for the Yangtze River Delta and Bohai Sea Rim region came close, at 54.2% and 54.6%. By end-use category, the indices for “Intermediate goods”, “Consumer goods” and “Producer goods” were greater than 50%, the highest being “Producer goods”, which was higher than 60%. The index for “Raw materials & energy” returned lower than 50%.
Backlog of Orders Index
The Backlog of Orders Index for September 2007 was 51.3%, 2.4 percentage points higher than the previous month. Among the 20 industries, 11 were higher than 50%, the leaders being “Pharmaceutical” and “Tobacco”, whose indices were greater than 60%. “Wood Processing & Furniture”, “Papermaking, Printing, Stationeries & Sporting goods” and “Smelting of Non-ferrous Metals” were 3 industries whose indices were at the 50% critical level. The indices for 6 industries, namely “Smelting of Ferrous Metals”, “Chemicals”, “Chemical Fibre, Rubber & Plastics”, “Garment, Footwear & Related Products”, “Specialised Machinery” and “Metal Products”, were lower than 50%. By region, there was little difference between the indices of Eastern, Central and Western regions, all being between 50.6% and 51.7%. Based on the three major economic zones, the indices for the Pearl River Delta and the Bohai Sea Rim region were above 50%, the respective figures being 53.1% and 54.5%; the index for the Yangtze River Delta was lower than 50%. By end-use category, the indices for “Raw materials & energy”, “Intermediate goods” and “Consumer goods” were greater than 50%, at between 50.4% and 53.2%; “Producer goods” was below 50%.
Stocks of Finished Goods Index
The Stocks of Finished Goods Index for September 2007 was 47.4%, rising 1.7 percentage points from the previous month. This index has stayed under the 50% level since January 2005. By industry, “Specialised Machinery”, “General Machinery”, “Transport Equipment” and “Electrical Machinery & Equipment” were 4 industries which report indices greater than 50%. 3 industries, namely “Tobacco”, “Wood Processing & Furniture” and “Pharmaceutical” returned with indices at the 50% critical level. The indices of the remaining 13 industries were lower than 50%; in particular, indices for “Metal Products”, “Communications, IT & Electronics Equipment”, “Papermaking, Printing, Stationery & Sporting goods”, “Food” and “Chemical Fibre, Rubber & Plastics” were the lowest, at lower than 45%. By region, the index for the Western Region was slightly above 50%; both the Eastern and Central regions were lower than 50%. Indices for the three major economic zones were under 50%, within which, the Pearl River Delta was the lowest, at only 44.7%. By end-use category, “Producer goods” returned with an index above the 50% level, at 51.4%, whereas those of the remaining three product categories were below 50%.
Purchases of Inputs Index
The Purchases of Inputs Index for September 2007 was 59.6%, gaining 3.5 percentage points from the previous month, and the highest during the past 5 months. Of the 20 industries, only the index of “Oil Refining & Coking” was lower than 50%; the remaining 19 industries reported greater-than-50% indices. “Pharmaceutical”, “Beverage”, “Garment, Footwear & Related Products”, “Specialised Machinery” and “Transport Equipment” were among the 10 industries with indices greater than 60%. “Pharmaceuticals” was the highest, at 71.5%. By region, the indices for the Eastern, Central and Western regions were close, at between 59.2% and 59.8%. Based on the three major economic zones, the index for the Pearl River Delta was the highest, at 61.6%; those of the Yangtze River Delta and Bohai Sea Rim regions were close, at 59.4% and 58.4% respectively. By end-use category, the index for “Consumer goods” and “Producer goods” were both greater than 60%, the respective figures being 60.9% and 65.4%; “Intermediate goods” and “Raw materials & energy” were lower, at 57.6% and 55.2% respectively.
Imports Index
Imports Index for September 2007 was 53.7%, 1.4 percentage points higher than the previous month. Among the 20 industries, 13 were higher than 50%, within which, 4 industries, namely “Communications, IT & Electronic Equipment”, “Wood Processing & Furniture”, “General Machinery” and “Specialised Machinery” were 4 industries whose indices were greater than 60%. “Beverage” and “Textile” saw their indices at the 50% critical level, whereas 5 industries, namely “Chemicals”, “Papermaking, Printing, Stationery & Sporting goods”, “Tobacco” and “Oil Refining & Coking” and “Metal Products”, returned with indices lower than 50%. By region, the Western Region returned with the highest index, at 58.90%, followed by the Eastern Region, at 54%, and the Central Region, the lowest, at 50.4%. Based on the three major economic zones, the Pearl River Delta reported the highest index of 61.9%; indices of the Yangtze River Delta and Bohai Sea Rim region were close, at 51%. By end-use category, the index for “Producer goods” was the highest, at 58.3%; indices for “Intermediate goods’ and “Consumer goods” were close, at 53.9% and 53.4% respectively; “Raw materials & energy” were lowest, at 50.6%.
Input Prices Index
The Input Prices Index for September 2007 was 65.6%, rising 2.6 percentage points from the previous month. The index has been climbing for two consecutive months; the current month’s performance is the second highest of the year, next only to May’s level. Among the 20 industries, only “Tobacco” was at the 50% critical level; among the remaining 19 industries, the indices for 16 were above 60%, within which, “Smelting of Ferrous Metals”, “Wood Processing & Furniture”, “Oil Refining & Coking”, “Chemical, Rubber & Plastics” and “Specialised Machinery” were the 5 leading industries whose indices were greater than 70%. “Smelting of Ferrous Metals” was 85.7%, and has been staying above 60% for 12 consecutive months. By region, the indices for the Eastern, Central and Western regions were greater than 60%, at between 64% and 69.9%. The figures for three major economic zones are similar. By end-use category, the index for “Raw materials & energy” is the highest, at 75.5%; the indices for the other three categories were close, at between 60.7% and 68.8%.
Stocks of Major Inputs Index
The Stocks of Major Inputs Index for September 2007 was 48.4%, losing 1.9 percentage points from the previous month. Among the 20 industries, “Tobacco”, “Beverage”, “Pharmaceutical”, “Electrical Machinery & Equipment” and “Chemical Fibre, Rubber & Plastics” were 5 industries with indices above 50%, whereas “Chemicals”, “Smelting of non-Ferrous Metals”, “Metals”, “General Machinery”, “Communication, IT & Electronic Equipment” were the 5 industries among the remaining 15 industries whose indices were below 50%. The index for “Wood Processing & Furniture” was the lowest, at below 40%. By region, the indices for the Eastern, Central and Western regions were all below 50%. The indices for the three major economic zones were similar. By end-use category, the index for “Producer goods” was slightly higher than 50%, at 50.8%; indices for the remaining categories were below 50%.
Employment Index
The Employment Index for September 2007 was 51.8%, edging down slightly by 0.3 percentage points. 14 of the 20 industries, including “Wood Processing & Furniture”, “Garment, Footwear & Related Products” and “Beverage”, returned with indices greater than 50%, within which, the index for “Wood Processing & Furniture” was 63.6%. The index for “Papermaking, Printing, Stationeries & Sporting goods” was at the 50% critical level. “Chemicals”, “Non-metal Minerals”, “Tobacco”, “Oil Refining & Coking” and “Food” saw their indices below 50%. By region, the index for the Eastern Regions was higher, at 52.1%; the indices for the Central and Western regions were close, at 51.2% and 51.7%. Indices for the three major economic zones were close, at between 51.5% and 52.4%. By end-use category, the indices between the four product categories were close, at between 51.3% and 52.4%.
Suppliers’ Delivery Time Index
The Suppliers’ Delivery Time Index for September 2007 was 51.7%, rising 0.6 percentage points from the previous month. By industry, “Garment, Footwear & Related Products”, “Specialised Machinery” and “Beverage” were among the 11 industries whose indices were higher than 50%. “Wood Processing & Furniture”, “Papermaking, Printing, Stationeries & Sporting goods”, “Non-metal Minerals”, “Smelting of Non-ferrous Metals” and “Electrical Machinery & Equipment” saw their indices at the 50% critical level. The indices for 4 industries, namely “Chemicals”, “Communications, IT & Electronic Equipment”, “Smelting of Ferrous Metals” and “Oil Refining & Coking” were below 50%. By region, the index for the Western region was the highest, at 54.5%; indices for the Eastern and Central region were close, at 51% and 51.4% respectively. Based on the three major economic regions, the index for the Pearl River Delta was the highest, at 52.3%; next was the Bohai Sea Rim region, at 51.1%; the Yangtze River Delta was the lowest, at 50.3%. By end-use category, only the index for “Raw materials & energy” was slightly below 50%; the remaining three categories reported indices higher than 50%, at between 50.5% and 52.9%.
Coal, crude oil, copper, aluminium, lead, steel products, pig iron, iron ore, fine iron ore powder, methanol, sulphur, sulphuric acid, maize, soy bean oil etc.
