The impact of the epidemic on the economy has further emerged. According to the data released by the National Bureau of statistics on April 30, the purchasing manager index (PMI) of China's manufacturing industry in April 2022 was 47.4%, down 2.1 percentage points from the previous month, the lowest level since March 2020.
Itemized data show that enterprise production has decreased significantly, market demand continues to decline, and the price index fluctuates at a high level. Due to the great uncertainty of the domestic epidemic and geopolitical conflict, enterprises' expectations for the future also continued to weaken, and the expected index of production and operation activities decreased by 2.4 percentage points to 53.3% compared with the previous month.
Zhang Liqun, a special analyst of China Federation of logistics and procurement, said that the PMI index fell significantly below the boom and bust line in April, indicating that the impact of the epidemic on economic growth has increased significantly. Since the beginning of the year, the good momentum of economic recovery has been seriously hindered. We must step up efforts to improve the package of measures for epidemic prevention and control and steady growth, make concerted efforts to find the optimal solution in the rich practice of the people as soon as possible, and eliminate the impact of the epidemic on steady growth and ensuring the overall situation of people's livelihood as soon as possible.
The decline in production and demand increased at both ends
In April, due to short-term factors, the operation of the industrial chain supply chain was blocked, personnel were difficult to work, commodity prices rose, and the supply shock and demand contraction pressure of the manufacturing industry increased.
The data showed that the production index decreased by 5.1 percentage points to 44.4% compared with the previous month, and the new order index and new export order index decreased by 6.2 and 5.6 percentage points to 42.6% and 41.6% respectively compared with the previous month. According to the enterprise survey, the proportion of enterprises reflecting insufficient market demand increased by 1.2 percentage points to more than 40% compared with the previous month, the highest since 2021.
According to Zhang Liqun's analysis, the index of new orders and new export orders fell by more than 5 percentage points below the boom and bust line, and more than 40% of the surveyed enterprises believed that insufficient demand was the biggest difficulty; The pressure of demand contraction has increased significantly. The production index and purchase volume index fell by more than 5 percentage points below the boom and bust line, indicating that the enterprise's production contracted significantly.
From the perspective of industry PMI, short-term factors have a prominent impact on the upstream industries in the manufacturing industry chain. In April, the epidemic spread in many regions such as the Yangtze River Delta. These regions are the important cities of the domestic equipment manufacturing industry. Affected by the epidemic, the growth rate of the equipment manufacturing industry slowed down significantly, and the PMI of the equipment manufacturing industry decreased by 3.7 percentage points to 45.8% compared with the previous month.
Zhao Qinghe, Senior Statistician of the service industry survey center of the National Bureau of statistics, said that although the prosperity level of the manufacturing industry continues to decline, some industries still operate generally stably. Among them, the PMI of agricultural and sideline food processing, refined tea for food, wine and beverage, non-metallic mineral products, railway, ship and aerospace equipment and other industries that ensure the basic livelihood of the people are higher than the critical point, and the expected index of production and operation activities is in the higher prosperity range of more than 55.0%.
Raw material prices continued to rise
In April, the geopolitical conflict has not been substantially alleviated, which has a great impact on the international commodity supply and price. In addition, the epidemic has led to a tight supply of raw materials, and the prices of raw materials in the manufacturing industry continue to operate at a high level. The purchase price index was 64.2%, which was 1.9 percentage points lower than that of the previous month, but it was still at a high level and operated at more than 60% for three consecutive months. The enterprise survey shows that the proportion of enterprises reflecting the high cost of raw materials has exceeded 60% for three consecutive months, and the cost pressure of enterprises continues to be large.
From the perspective of the industry, the purchase price index and ex factory price index of main raw materials in upstream industries such as petroleum, coal and other fuel processing, ferrous metal smelting and rolling processing, nonferrous metal smelting and rolling processing exceed 70.0% and 60.0% respectively. The purchase price of raw materials and product sales prices in relevant industries continue to operate at a high level, and the cost pressure of middle and downstream industries continues to increase.
Zhang Liqun said that affected by the contraction of demand, the price index changed from up to down; However, if demand picks up and production and supply decline significantly, the price increase will increase rapidly, and the potential supply shock pressure should not be underestimated. In addition, under the situation of large contraction at both ends of supply and demand, enterprise confidence weakened, and the expected index of production and operation activities decreased by 2.4 percentage points.
In terms of enterprise scale, the PMI of large enterprises was 48.1%, down 3.2 percentage points from the previous month and below the critical point; The PMI of small and medium-sized enterprises were 47.5% and 45.6% respectively, both down 1.0 percentage points from the previous month and continuing to be lower than the critical point.
Wen Tao, an analyst at China Logistics Information Center, said that although the impact of short-term factors continued to exist in April, the stability of small and medium-sized enterprises has been consolidated driven by governments at all levels actively implementing policies to protect market players, especially by effectively supporting the development of small and medium-sized enterprises. The PMI of medium-sized enterprises and small enterprises were 47.5% and 45.6% respectively, down 1 percentage point from the previous month, lower than the PMI of manufacturing industry, and the decline of production index and new order index of small and medium-sized enterprises were lower than the decline of overall supply and demand index of manufacturing industry.
Wen Tao stressed that the downward pressure on the economy increased in April, but with China's continuous compaction of epidemic prevention and control measures, further implementation of the deployment of ensuring smooth freight logistics and full implementation of measures to ensure and increase energy supply, the impact of short-term factors will gradually weaken and the economy will have a foundation for rapid recovery. Moreover, with the steady construction of the national unified market and the comprehensive strengthening of the construction of modern infrastructure system, the future economy has a stronger driving force for stabilization and greater room for recovery.
