On June 30, 2022, the Service Industry Survey Center of the National Bureau of Statistics and China Federation of Logistics and Purchasing released the China Purchasing Managers Index. In this regard, Zhao Qinghe, senior statistician of the Service Industry Survey Center of the National Bureau of Statistics, made an interpretation.

As the situation of domestic epidemic prevention and control continues to improve, and the implementation of a package of policies and measures to stabilize the economy has accelerated, the overall recovery of my country’s economy has accelerated. In June, the manufacturing purchasing managers’ index, the non-manufacturing business activity index, and the composite PMI output index were 50.2 percent, 54.7 percent, and 54.1 percent, respectively, 0.6, 6.9, and 5.7 percentage points higher than the previous month, and all rose to the expansion range.

I. Manufacturing Purchasing Managers Index returned to expansion range

In June, the manufacturing PMI rebounded to 50.2%, returning to expansion territory after three consecutive months of contraction. Among the 21 industries surveyed, PMI of 13 industries is in the expansion range. The manufacturing boom continues to expand, and positive factors continue to accumulate.

(1) The recovery of production and demand is accelerated. With the continuous progress of resumption of work and production, the production and demand that were suppressed in the early stage of enterprises have been released at a faster pace. The production index and new order index were 52.8% and 50.4%, respectively, 3.1 and 2.2 percentage points higher than the previous month, and both rose to the expansion range. From the perspective of the industry, the two indexes of the automobile, general equipment, special equipment, computer communication electronic equipment and other industries are both higher than 54.0%, and the recovery of production and demand is faster than that of the manufacturing industry as a whole. At the same time, policies and measures such as logistics guarantee and smooth flow have been effective. The supplier delivery time index was 51.3%, 7.2 percentage points higher than the previous month. The supplier delivery time was significantly faster than the previous month, which effectively guaranteed the production and operation of enterprises.

(2) The PMI of large and medium-sized enterprises is in the expansion range. The PMI of large enterprises was 50.2%, which was higher than the critical point for two consecutive months, continuing the momentum of recovery expansion. The PMI of medium-sized enterprises was 51.3%, 1.9 percentage points higher than the previous month, rising to the expansion range, and production activities accelerated. The PMI of small enterprises was 48.6%, 1.9 percentage points higher than the previous month. The recovery process of small enterprises was relatively slow, but the level of prosperity had recovered.

(3) The recovery of high-tech and equipment manufacturing industries accelerated. The PMIs of high-tech manufacturing and equipment manufacturing were 52.8 percent and 52.2 percent, respectively, 2.3 and 3.3 percentage points higher than the previous month. The PMI of the consumer goods industry was 50.9%, 0.7 percentage points higher than the previous month, and the consumer goods industry continued to recover. The PMI of high energy-consuming industries was 48.3%, which was 1.7 and 1.9 percentage points lower than that of the previous month and the overall manufacturing industry, and the overall level of prosperity was low.

(4) Business expectations have improved. The production and operation activity expectation index was 55.2%, 1.3 percentage points higher than the previous month, and rose to a nearly three-month high, and business confidence continued to recover. Judging from the industry situation, the production and operation activity expectation index of food, alcoholic beverages, refined tea, automobiles, railways, ships, aerospace equipment and other industries is higher than 60.0%. Metal smelting and rolling processing and other industries continued to fall below 50.0%, and corporate confidence needs to be strengthened.

Although the manufacturing industry continued to recover this month, 49.3% of enterprises still reported insufficient orders, and weak market demand was still the main problem facing the manufacturing industry. At the same time, the ex-factory price index fell to 46.3%, staying in the contraction range for two consecutive months. The profit margins of some companies were squeezed to a certain extent, and the operating pressure was relatively large.

II. The non-manufacturing business activity index rebounded sharply to the expansion range

In June, the non-manufacturing business activity index was 54.7%, 6.9 percentage points higher than the previous month, and rebounded significantly for two consecutive months.

(1) The prosperity of the service industry has returned to the expansion range. In June, the situation of domestic health incidents was generally stable, various policies and measures to help enterprises were gradually implemented, the service industry continued to recover, and the business activity index rose to 54.3% from the low base level in April and May, up from 7.2 points in the previous month. It returned to the expansion range, and the operating conditions of service industry enterprises improved compared with May. Among the 21 industries surveyed, the business activity index in the expansion range increased from 6 in the previous month to 19, and the prosperity of the service industry expanded significantly. Among them, the business activity index of the industries that were severely affected by the health incident in the early stage all rebounded, and the railway transportation, air transportation and other industries were higher than 65.0%, and the total business volume increased month-on-month for two consecutive months; road transportation, accommodation, catering, ecological protection and Environmental governance, culture and sports and other industries have risen above the critical point, and the total business volume has changed from falling to rising. From the perspective of market demand and expectations, the new orders index and business activity expectation index were 53.7% and 61.0%, respectively, 10.0 and 5.8 percentage points higher than the previous month, indicating that with the weakening of the impact of the epidemic, the market demand for the service industry has recovered, and enterprises Confidence is gradually restored.

(2) The construction industry rose to a higher economic range. The business activity index of the construction industry was 56.6%, 4.4 percentage points higher than the previous month, indicating that the prosperity of the construction industry has rebounded. At the same time, the supplier delivery time index was 50.5%, 8.8 percentage points higher than the previous month, and rose to the expansion range, indicating that the smooth transportation and logistics policy has achieved practical results, and the poor transportation of raw materials in the construction industry has been alleviated, which effectively guaranteed the construction progress. From the perspective of market expectations, the business activity expectation index rebounded by 5.2 percentage points to 63.1%, indicating that companies are more optimistic about the recent industry development prospects.

III. The composite PMI output index continued to rebound

In June, the comprehensive PMI output index was 54.1%, 5.7 percentage points higher than the previous month, indicating that the overall production and operation of Chinese enterprises showed a recovery expansion. The manufacturing production index and non-manufacturing business activity index, which make up the composite PMI output index, were 52.8% and 54.7%, respectively.

The purchasing managers’ index returned to the expansion range in June, reflecting the significant positive changes in the production and operation conditions of enterprises compared with May. However, there are still many uncertainties in the current domestic and international economic environment. It is necessary to further refine and implement a package of policy measures to stabilize the economy, actively expand effective demand, and consolidate the momentum of economic recovery and development.