Monarch’s November PMI Review: Data Exceeds Expectations, Trends Still Waking Up

Monarch’s November PMI Review: Data Exceeds Expectations, Trends Still Waking Up

PMI-than-expected: Causes and Sustainability – November PMI data Comments Source: Macro monarch of the team: Flower Changchun, Dong Qi, a comprehensive summary of the November PMI indicators, the need to improve internal external demand, mainly due to construction activity and continued high economicThe part that is expected to exceed expectations is also due to the significant drop in the MoM in the beginning of October and the impact of warm winter construction activities.

Combined with the current fundamentals, PMI has been below the line of prosperity and dryness for six consecutive months. We believe that the rise of PMI to the line of prosperity and dryness in a single month does not reflect the trend of the economy and bottoming out.After stabilizing the interval, at least the volatility around the 50-point boundary is bound to occur, and it will take time for the economic growth to rebound.

  In November, the manufacturing PMI rebounded to the line of prosperity and supply, and both supply and demand showed improvement: 1) The manufacturing PMI in November rebounded significantly from 0 in October.

Nine averages, after falling below the critical point for 6 consecutive months, returned to the extended range again, and both production and demand indicators improved.

  2) The destocking of the manufacturing industry is good, and the raw material inventory index rebounded slightly to 47 in November.

8%, reflecting the improvement in the margin of raw materials destocking, new orders and purchases returned to the line of prosperity, and the improvement was significant. At the same time, the inventory of finished products continued to decline to 46.

4%, the manufacturing industry went to the warehouse to make progress.

  3) The two major price indexes continued to fall, reflecting doubts about improved demand for sustainability and the November PPI chain still under pressure.

  4) In November, both the new PMI export order index and the import index rebounded. Although both maintained a boring offline line, the incremental changes gradually decreased. The trade base increased overall in the next two months during the alternate year, and the high probability of the trade side will step into the pressure buffer.At this stage, margins improved.

  5) In November, the PMI of various types of enterprises improved across the board, but only large enterprises were in the expansion range, and the rest were still in the contraction range.

Small enterprises improved rapidly, and medium-sized enterprises continued to improve, and the overall direction of changes in Caixin’s PMI indicators was consistent.

  In November, China’s non-manufacturing business activity index was 54.

4%, an increase of 1 from the previous month.

6 levels, the main improvement is the sales price, new orders and employees.

From the perspective of internal items, the service industry’s PMI has improved, support for construction activities has been strengthened again, new orders for construction have rebounded strongly, and the prosperity of the infrastructure chain has contributed to continuous improvement.

  From a follow-up point of view, the PMI indicator may still fluctuate around the line of prosperity and dryness for the time being, and the previous PMI rebounded to the line of prosperity and dryness, and the rebound of economic growth has a certain lag.

Generally speaking, in the first quarter of this year, the policy ultimately led to strong economic momentum. The overall base was not low, and the downward pressure on real estate investment has not yet been fully reflected. However, there is still some internal uncertainty. Trade frictions and changes in external demand may stillThe impact on the trade side at the beginning of the Ming Dynasty, and the short-term end before the trend of fundamental recovery is still on the way.

  The first text is that the manufacturing PMI rebounded, and the marginal stabilization has begun to show, but the manufacturing PMI is still below 50 in November in the short term.

2%, a significant increase of 0 from October.

The 9 averages, after exceeding the critical point for 6 consecutive months, returned to the extended range again.

The overall improvement of the sub-items in the past 10 months, both supply and demand are now improving, and the economic contraction pressure is weakening from the previous month.

In the September PMI review, we predicted that the company would stabilize or slowly start in the year. In the November report, we proposed that SMEs would be ahead of the entire economy in the short-term or present (“Economic Momentum Observation: Is the” Short-Term End “of SMEs?
?

-Guotai Junan Macro Weekly (20191110) “), and pointed out that the two major PMIs deviate from the stage, and the final production and operation trends are mostly consistent with the Caixin PMI.

At present, the PMI seems to show some indicators of stabilization. From a perspective, the performance of the construction industry is outstanding or due to the warm winter (Figure 2), but some indicators of the manufacturing industry are still weakening, reflecting the overall economic momentum.Weak features: In November, the manufacturing PMI shifted to an improvement between current supply and demand. Production and new orders all rebounded substantially. New export order indices rebounded, mainly due to the increase in overseas orders at Christmas. The manufacturing destocking process continued and finished products were produced.Inventories continued to decline, and the margin for destocking of raw materials slowed down; the price index contracted, and the two major price indexes fell in November. The purchase price index of major raw materials fell by 1 from October.

Four of them reached 49%, and the ex-factory price index dropped by 0 from October.

7 excellent to 47.

3%, deflationary pressure on industrial prices has not abated.

  (1) The overall supply-demand gap has picked up, staying flat at the beginning of this year (Figure 3).

In November, the PMI new order indicator rose by 1.

7 points to 51.

3%, returning to March and April levels this year.

Finished product inventory fell by 0.

3 points to 46.

4%, the same month as in the initial state, the PMI angle of supply and demand gap improved, reflecting the margin of demand has improved compared to October, and the overall chain momentum is close to the initial state.

  (2) The two major price indexes continue to fall, and the pressure on short-term PPI if the base effect is excluded (Figure 4).

The purchase price index of raw materials continued to fall sharply, reflecting doubts about improved demand for sustainability and PPI in November was still weaker than the previous month.

  (3) The manufacturing industry went to warehouses well, and the inventory of finished products fell for four consecutive months.
The raw material inventory index rose slightly to 47 in November.
8%, reflecting the improvement in the margin of raw materials destocking, new orders and purchases returned to the line of prosperity, and the improvement was significant. At the same time, the inventory of finished products continued to decline to 46.

4%, the manufacturing industry went to the warehouse to make progress.

  (4) For exports, the import index rebounded significantly below the line, and imports continued to improve (Figure 5).

Both the PMI new export order index and the import index rebounded in November, with the former rising by 1.

8 points, the others rose by 2.

Nine points, up to 48.

8%, 49.

8%, although both remain below the line of prosperity and dryness, but reflect the weakening of the marginal deterioration, overlapping the overall value of the trade base in the next two months of the year, the high probability of the trade end will enter the stage of pressure buffering, and marginal improvement.

  (5) In terms of enterprise scale, enterprises have improved across the board, and only large enterprises are in the expansion range (Figure 6).

Large companies have a PMI of 50.

9%, an increase of one merger over October, and the PMI of medium-sized enterprises was 49.

5%, higher than October 0.

5 partnerships with a small business PMI of 49.

4%, higher than October 1.

5 averages.

Small enterprises improved rapidly, and medium-sized enterprises continued to improve, and the overall direction of changes in Caixin’s PMI indicators was consistent.
  Second, the non-manufacturing industry has improved significantly. The construction industry activity indicators are all located in the high economic range in November. China’s non-manufacturing business activity index is 54.

4%, an increase of 1 from the previous month.

Six digits, still in the expansion range, the main improvement is in sales prices, new orders and employees (Figure 8).

  (1) The service industry PMI is 53.

5%, a sharp rise in the previous October2.

Single digit, growth and repair, prosperity rebounded and juxtaposed (Figure 9).

Looking at the broad industry categories, the business activity index of the postal industry, accommodation industry, telecommunications, radio and television, and satellite transmission services, money and financial services, capital market services, and insurance is 58.

With a high business climate above 0%, the business as a whole has grown rapidly.

Railway transportation, road transportation, catering, real estate and other industries’ business activity indexes are in the contraction range.

  (2) The business activity index of the construction industry is 59.

6%, a decrease of 0 from the previous month.

Eight of them are single, but they are still in the high-boom range.

The new orders index increased by 1 from the previous month.

Two digits, up to 56.

0%.

Construction industry business activity expectations index is 63.

1%, a decrease of 0 from the previous month.

In one subdivision (Figure 10), the segmentation indicators of construction activities are all located in the high prosperity zone, which reflects the strong momentum of internal construction activities, partly due to warm winter factors.

  Third, the PMI reflects the fundamental risk of lowering the risk again in the short term, but the trend is still waiting for time. November PMI reflects the relative improvement in domestic supply and demand, the substitution also reflects the improvement in domestic demand over external demand, and the outstanding performance of construction activities.

However, from a micro perspective, most indicators of the manufacturing industry still have to surpass the substitution. Although the realization of the rebound this month has traces of improvement in supply and demand, it is also difficult to predict the impact of the decline in the beginning of October.

Part of the improvement in external demand is due to the increase in overseas orders with Christmas, domestic construction activities are active, flat and reorganized, and partly due to the warm winter factors, which will cause the factors to converge.

The economic leading index we established shows that the current economic momentum is still weak, and the performance of some black systems related to infrastructure is dazzling, and the prosperity has improved compared with the beginning of 2019 (“The economic momentum is slowly declining, structural replenishment or opening-Guotai Junan Economic IndexTracking Series (1) “, 20191128), similar to the current PMI reflected signals.

  Combining the past three years of PMI’s long-term off-line and rapid turnaround, we found that for 7 months since August 2015, it has been continuously under the off-line and rebounded to the off-line and continued to rise.It fell below the Rongkuang line, but the overall trend is upward. The monthly data is basically above 50, but the GDP growth rate is always flat6.
At 7%, the rebound in growth lags behind the PMI rebound for two quarters (2016Q4 rebounded to 6).
8%); In December 2018, it was below the Rongkuang line for three consecutive months. After the policy rush in the first quarter of 2019, it quickly rose to 50 in March.

5%, one month later fell again the Rongrong line and trend downward, GDP growth continued to fall; May 2019 was below the Rongrong line for six consecutive months, returning to more than 50 this month.

  Based on the current fundamentals, PMI is below the line of prosperity and dryness for six months in a row. We think that the rise of PMI to the level of prosperity and dryness in a single month does not reflect the trend of economic bottoming and rebound.After stabilizing the interval, it will at least possibly fluctuate around the 50-point boundary, and it will take time for economic growth to bottom out: 1 (1) Adjusting the fourth quarter of the trade end overlapping low base or weak recovery,深圳桑拿网 but the economic momentum in Europe and JapanCurrently, it is still weak. Although the manufacturing PMI has rebounded for many months, it is still below the Rongkuai line and the momentum of the developed economies is still weak, or it may affect external demand again; (2) Replace the infrastructure development in the first quarter.It can be expected, but the downward pressure on real estate investment cannot be fully reflected, and the weak state of domestic manufacturing investment is difficult to change in the short term. Therefore, the probability of manufacturing PMI will still change around the line of prosperity and dryness, and it will take time to recover the economic trend in the short term.Continuous improvement needs to wait for the reduction of external uncertainty and the further release of internal policy 西安耍耍网 space.