The manufacturing PMI fell slightly by 01pct to 491%, the decline was less than the monthly average of the Spring Festival in the three years before the epidemic, and it was in the contraction range for the fifth consecutive month. The non-manufacturing PMI rose 07pct to 514%, which is still the lowest value in the same period in history. Among them, the prosperity of the construction industry and the service industry continued to trend last month, and the former continued to fall by 04pct to 535%, the latter continued to rise by 09pct to 51%, the increase exceeded the monthly average of the Spring Festival in the three years before the epidemic, which was the main reason for the month-on-month increase in the PMI of the non-manufacturing industry. Figure 1: Purchasing Managers' Index (PMI) for February
Source**: Wind, China Merchants Bank Research InstituteFigure 2: Month-on-month differentiation between manufacturing and non-manufacturing prosperity
Source**: Macrobond, China Merchants Bank Research Institute1. Production and demand: demand is weak and production is blockedThe prosperity of the demand side is still shrinking. In February, the prosperity of domestic and foreign demand in the manufacturing industry did not improve month-on-month, with the new orders index of 49% unchanged from the previous month, and the new export orders index falling by 09pct to 463%, which is basically in line with seasonal characteristics. Figure 3: Repair of internal and external needs in the manufacturing industry has not improved
Data**: Macrobond and China Merchants Bank Research Institute's non-manufacturing demand boom diverged month-on-month. In February, the new orders index of the construction industry and the service sector edged up by 0.0 respectively against the season6pct, hyper-seasonal downside 1pct to. 7%, pointing to the post-holiday construction industry demand repair or the first start. The month-on-month decline in the prosperity of the production side was slightly more than seasonal. Affected by holidays and extreme weather, the manufacturing production index fell sharply by 1 month-on-month in February5pct to 498%, temporarily returning to the contraction range after eight months. Employment continued to be under pressure, with the manufacturing, construction and services employment indices all remaining in contraction territory since the second quarter of last year. Figure 4: Production-side fixes are temporarily blocked
Data**: Macrobond, China Merchants Bank Research Institute** index mainly declined. As the recovery of the production side is relatively stronger than that of the demand side, the manufacturing ex-factory ** and service charge** indices have been in the contraction range since the fourth quarter of last year. The marginal change occurred in the construction industry, where the fee** index fell seasonally month-on-month due to continued weak demand in the off-season, falling into contraction territory for the first time in nine months. The manufacturing raw materials ** index continued to decline slightly by 03pct to 501%, pointing to the fact that PPI inflation may remain under pressure in February. Figure 5: PMI** Index Mixed
Data**: Macrobond, China Merchants Bank Research Institute, weak production and demand at both ends and ** downside affect the willingness of enterprises to procure, and the inventory of manufacturing enterprises continues to slow down. In February, the inventory index of raw materials and finished products was in the contraction range. The marginal change is that the difference between the inventory index of new orders and finished products has turned positive slightly, and the pre-holiday stocking of enterprises has been consumed, but the actual inventory is still higher than the demand repair, pointing to the subsequent production space of enterprises or being suppressed. 2. Industry: The characteristics of holidays are highlightedIn terms of manufacturing, raw materials and energy, intermediate categories and equipment rebounded month-on-month, and consumer goods continued to decline from the previous month, of which the equipment boom remained the first. In terms of non-manufacturing, information and business services and residential services rebounded month-on-month, while transportation and housing construction fell month-on-month. Among them, holiday consumption drove the PMI of residents' services to rebound sharply by 94pct to 537%。3. Summary: Demand needs to be repaired, and production is still in the off-seasonOverall, the PMI fell slightly month-on-month in February, staying in contraction territory for the fifth consecutive month. The momentum of demand recovery continued to be weak, and the production of enterprises was temporarily hindered due to seasonal factors, which continued to affect the procurement and inventory of enterprises. Looking ahead, the post-holiday start is gradually entering the spring, and the PMI index in March stopped falling month-on-month or seasonally, but it is still below the boom and wither line.