The Chinese and foreign economies have entered the stage of internal struggleThe domestic manufacturing PMI fell again.
Climatically, this year's winter has indeed been warm, but in the economic and real estate sectors, the cold has persisted. In stark contrast to the collapse of the housing market, monthly economic indicators occasionally offer hope. What is the message of the recently released China Purchasing Managers' Index (PMI) for November?
On the last day of November, the National Bureau of Statistics (NBS) released China's Purchasing Managers' Index (PMI) for November. In November, the manufacturing purchasing managers' index (PMI) was 494%, down 0 from the previous month1 percentage point, the manufacturing industry boom fell slightly.
In November, the non-manufacturing business activity index was 502%, down 04 percentage points, still above the critical point;The non-manufacturing sector continues to expand. In terms of enterprise size, the purchasing managers' index of large enterprises is 505%, down 0 from the previous month2 percentage points, still above the tipping point;The Purchasing Managers' Index for medium-sized companies was 488%, up 01 percentage point, below the critical point;The Small Business Purchasing Managers' Index was 478%, down 0 from the previous month1 percentage point, below the critical point;
As China's labor force is mainly absorbed by small and medium-sized enterprises, the slight pullback in the PMI index in November could not hide the difficulties in the production and operation of most enterprises, which means a loss of employment and income for most people.
In November, the non-manufacturing business activity index was 502%, down 04 percentage points, but still above the tipping point, the pace of non-manufacturing expansion slowed. The index of business activity in the services sector was 493%, down 08 percentage points, with a decrease in activity in the services sector. The index of business activity in the construction sector was 550%, up 1 from the previous month5 percentage points, entering a higher expansion range, the construction progress continued to accelerate. From the perspective of market expectations, the business activity expectation index is 626%, continuing to rise into the high expansion range, construction enterprises have steadily increased their confidence in the recent market development.
The non-manufacturing business activity index suffers from the same problem as the manufacturing purchasing managers' index, with the non-manufacturing business activity index above the expansion threshold, but the construction activity index contributing more to the growth. The index of business activity in the services sector fell below the expansion zone. Behind this situation are a large number of service enterprises and hard-working day workers.
In November, China's Purchasing Managers' Index (PMI) showed a positive change, albeit slightly lower year-on-year, but this was due to the average. Small and medium-sized enterprises (SMEs) and services, which represent the pillars of economic dynamism and employment, fell below the expansion zone. This does not bode well for the Chinese economy at the end of the year.
The decline in economic growth is not only the case in China, but also in the United States, the world's largest economy, and the manufacturing purchasing managers' index in October also fell below the boom and bust line. According to data released by S&P Global Ratings on the 24th local time, the U.S. manufacturing purchasing managers' index (PMI) in October fell from 50 due to weak demand and rising costs0 to 494, lower than the previous ** 498, down from 49 in the same period last year8。
The situation in other economies is also not encouraging. According to data released by the China Federation of Logistics and Purchasing, in October 2023, the global manufacturing purchasing managers' index (PMI) was 478%, down 0 from the previous month9 percentage points, ending the trend of rising for 3 consecutive months and less than 50% for 13 consecutive months, and the global manufacturing industry showed a downward trend.
In October, in another major economy, the European manufacturing PMI came in at 446%, down 05 percentage points, the increase is lower than the previous month, and it is less than 50% for the 15th consecutive month.
In the International Monetary Fund's World Economic Outlook report released in October, world economic growth will continue to slow this year and next. Of these, the economic growth rate in 2023 is expected to be 30%, down from 35% and 2 in 20249%, down 01 percentage point.
Since the epidemic, global economic growth has been sluggish, and this year's difficulties are obvious to all, and next year's ** economic growth rate is still low. In contrast, China's manufacturing PMI index fell the least in November. The silver lining is that in previous years, in order to save the economy, countries did not hesitate to use various means such as printing money and releasing water. China's economic stimulus has been relatively modest, and there is plenty of ammunition in the political toolbox.
Short-term economic fluctuations should not be ignored or taken too seriously. As long as the national real estate situation stabilizes, the full recovery of the real economy should be a matter of course.