China's Manufacturing Purchasing Managers' Index and Non-manufacturing Business Activity Index Rise Slightly within the Expansion Interval in August 2018

　　On August 31, 2018, the Service Survey Center of National Bureau of Statistics and China Federation of Logistics & Purchasing jointly released the Purchasing Managers' Index (PMI) of China. In this regard, Zhao Qinghe, a senior statistician from the Service Survey Center of the National Bureau of Statistics, gave his interpretation.

　　I. The manufacturing PMI slightly rises

　　The manufacturing PMI of August was 51.3%, 0.1% up compared to last month and equal to the annual average. Since the beginning of this year, it has been remaining within the range of high prosperity of 51.0%-52.0%, and the manufacturing maintained a steady expansion trend on the whole in addition to the month of Spring Festival. The main features of this month are as follows: 1. Production continues to expand, and market demand tended to be stable. The production index was 53.3%, 0.3% up compared to last month and 0.2% higher than the annual average; the new orders index was 52.2%, 0.1% lower than last month. Driven by the acceleration of production activities, the purchase willingness of enterprises increases, with the purchase volume index of 51.8%, 0.3% up compared to last month. 2. The development momentum of the high-tech manufacturing industry was constantly accumulated and generated. PMI of high-tech manufacturing industry was 54.3%, 1.7% and 2.4% up compared to last month and last year, respectively. The manufacturing PMI for medical equipment, special equipment, electrical machinery and devices and computer, communication and electric equipment was obviously higher than the overall level of manufacturing, and the production index and new orders index of these industries remained within the range of high prosperity, above 55.0%. 3. The price index rose to a recent peak. Influenced by such factors as price rebound of important means of production in the field of circulation, the purchase price index and producer price index of main raw materials were 58.7% and 54.3%, 4.4% and 3.8% up compared to last month, respectively. The purchase price index of main raw materials in such industries as ferrous metal, chemicals, textile, and metal products is within the high range of above 60.0%. 4. The level of prosperity of small and medium-sized enterprises increased. The PMI of large enterprises was 52.1%. Although it fell by 0.3% compared to last month, it was still 0.8% higher than that of the whole manufacturing industry and was still the major impetus to support the growth of manufacturing industry. The PMI of small and medium-sized enterprises was 50.0% and 50.4%, respectively, 0.7% and 0.5% up compared to last month, higher than the annual average. 5. The prosperity of import and export has fallen due to the intensifying international economic and trade frictions and uncertainties in the external environment. The new export order index and import indexes were 49.4% and 49.1%, 0.4% and 0.5% lower than last month, respectively. However, the import and export of high-tech manufacturing industry continued to expand. The new export order index and import indexes were 53.9% and 54.3%, 0.9% and 3.3% up compared to last month and 1.5% and 2.6% up compared to last year, respectively.

　　According to survey results, the proportion of enterprises reflecting that the high cost of logistics and fluctuation of RMB exchange rate have a certain impact on production and operation is 27.7% and 18.3%, respectively, increased compared to last month.

　　II. Non-manufacturing business activity index picks up slightly

　　The non-manufacturing business activity index of August was 54.2%, 0.2% up compared to last month and 0.8% higher than the same period last year, indicating that the overall expansion of non-manufacturing industry has accelerated

　　The service industry has maintained steady and rapid growth. The business activity index of the service industry was 53.4%, 0.4% up compared to last month and 0.8% up compared to last year, respectively. The growth rate of the service industry has accelerated. Among the 20 industries surveyed, the business activity index of 14 industries is within the expansion interval. The month was the peak season of summer consumption, during which the business activity index of related industries such as retail, railway transportation, air transport, telecommunications, Internet software and tourism is within the interval of higher prosperity of above 56.0%, and the business activities tended to be more active. The business activity index of securities, insurance, logistics and other industries was below the threshold level, and the total volume of business has fallen. From the perspective of market demand and expectation, the new orders index and expected business activity index were 50.7% and 60.6%, 0.6% and 1.1% up compared to last month, respectively, and 0.2% higher than the annual average. The market demand of the service industry has been further released, and the market expectation continues to improve.

　　The prosperity of the construction industry has declined. Recent adverse weather conditions such as high temperature, typhoon and rainstorm have an impact on outdoor operations of the construction industry. The business activity index of the month was 59.0%, 0.5% lower than last month. It is still within the interval of high prosperity, the construction industry continues to grow rapidly, but the expansion rate has slowed down. From the perspective of labor demand and market expectation, the employee index and expected business activity index of the construction industry were 54.3% and 65.8%, 0.8% and 1.7% up compared to last month, respectively. The employee index has risen for three consecutive months, the employment of the construction industry continues to grow and the enterprises' confidence in the future market continues to increase.

　　III. Comprehensive PMI output index rises again

　　The comprehensive PMI output index of August was 53.8%, 0.2% up compared to last month and 0.1% higher than the same period last year, indicating that the overall expansion of the production and operation activities of Chinese enterprises has accelerated. The manufacturing production index and non-manufacturing business activity index, which constitute the comprehensive PMI output index, were 53.3% and 54.2%, respectively, with a slight increase compared to last month.