Returning to the expansion zone! China's official manufacturing PMI for December is 50.1, and the non-manufacturing PMI is 50.2

China's economic prosperity level overall rebounded in December, with all three major indices rising into the expansion zone. Both production and demand in the manufacturing sector showed significant recovery, and the PMI for large enterprises returned to the expansion zone. The non-manufacturing PMI improved, with a slight rebound in the service sector, and the composite PMI output index rose to a recent high.

On December 31, the National Bureau of Statistics released data showing that China's official manufacturing PMI for December was 50.1, marking the first time it has risen into the expansion zone since April, up from 49.2. China's official non-manufacturing PMI for December was 50.2, up from 49.5. China's official composite PMI for December was 50.7, an increase of 1.0 percentage points from the previous month, which was 49.7.

Manufacturing PMI Rises to Expansion Zone for the First Time Since April

In December, the manufacturing Purchasing Managers' Index (PMI) was 50.1%, an increase of 0.9 percentage points from the previous month, rising into the expansion zone. Among the 21 industries surveyed, 16 industries saw their PMIs improve compared to the previous month, indicating an improvement in the production and operational conditions of relevant enterprises.

In terms of enterprise size, the PMI for large enterprises returned to the expansion zone, with a PMI of 50.8%, an increase of 1.5 percentage points from the previous month, above the critical point; the PMI for medium-sized enterprises was 49.8%, an increase of 0.9 percentage points from the previous month, still below the critical point; the PMI for small enterprises was 48.6%, a decrease of 0.5 percentage points from the previous month, below the critical point.

From the classification indices, among the five classification indices that make up the manufacturing PMI, the production index, new orders index, and supplier delivery time index were all above the critical point, while the raw material inventory index and employment index were both below the critical point.

The production index was 51.7%, an increase of 1.7 percentage points from the previous month, indicating that production activities in manufacturing enterprises accelerated.

The new orders index was 50.8%, an increase of 1.6 percentage points from the previous month, indicating that market demand in manufacturing improved.

The raw material inventory index was 47.8%, an increase of 0.5 percentage points from the previous month, indicating that the decline in the inventory of major raw materials in manufacturing narrowed.

The employment index was 48.2%, a decrease of 0.2 percentage points from the previous month, indicating a slight decline in the employment prosperity of manufacturing enterprises.

The supplier delivery time index was 50.2%, an increase of 0.1 percentage points from the previous month, indicating that the delivery time of raw material suppliers in manufacturing continued to accelerate.

Chief statistician of the Service Industry Survey Center of the National Bureau of Statistics, Huo Lihui, interpreted:

(1) Significant rebound on both production and demand sides. The production index and new orders index are 51.7% and 50.8%, respectively, up 1.7 and 1.6 percentage points from last month. Notably, the new orders index has risen above the critical point for the first time since the second half of the year, indicating significant expansion on both production and demand sides in the manufacturing sector compared to last month. By industry, the production index and new orders index for the agricultural and sideline food processing, textile and apparel, and computer communication and electronic equipment sectors are all above 53.0%, accelerating the release of production and demand; while the two indices for non-metallic mineral products and black metal smelting and rolling processing sectors are both below the critical point, indicating that related industries still face certain pressures. Driven by the rebound in manufacturing production and demand, corporate procurement activities have accelerated, with the procurement volume index rising to the expansion range at 51.1%.

(2) Large enterprises' PMI returns to the expansion range. The PMI for large enterprises is 50.8%, up 1.5 percentage points from last month, rising above the critical point; the PMI for medium-sized enterprises is 49.8%, up 0.9 percentage points from last month, indicating a recovery in the economic level; the PMI for small enterprises is 48.6%, down 0.5 percentage points from last month, showing a slight decline in the economic level.

(3) Key industry PMIs are all higher than last month. The PMI for high-tech manufacturing is 52.5%, up 2.4 percentage points from last month, indicating a positive growth trend in the industry. The PMIs for equipment manufacturing and consumer goods industries are both 50.4%, up 0.6 and 1.0 percentage points from last month, respectively, both rising into the expansion range. The PMI for high-energy-consuming industries is 48.9%, up 0.5 percentage points from last month, continuing to recover in economic level.

(4) Expectation index rises to a high economic range. The production and business activity expectation index is 55.5%, up 2.4 percentage points from last month, indicating that manufacturing enterprises' confidence in market development continues to strengthen. By industry, driven by factors such as pre-holiday stocking, the production and business activity expectation indices for agricultural and sideline food processing, food and beverage, and refined tea industries have all risen to above 60.0%, indicating a high economic range, with related enterprises being more optimistic about recent industry developments.

Non-manufacturing PMI shows improvement, slight recovery in service sector

In December, the non-manufacturing business activity index is 50.2%, up 0.7 percentage points from last month, returning to the expansion range.

By industry, the business activity index for the construction industry is 52.8%, up 3.2 percentage points from last month; the business activity index for the service industry is 49.7%, up 0.2 percentage points from last month. In the service industry, the business activity indices for telecommunications, broadcasting, television and satellite transmission services, monetary financial services, and capital market services are all above 60.0%, indicating a high economic range; while the business activity indices for retail and catering industries are both below the critical point.

The new orders index is 47.3%, an increase of 1.6 percentage points from last month, indicating a slight recovery in market demand for the non-manufacturing sector. By industry, the new orders index for construction is 47.4%, up 1.3 percentage points from last month; the new orders index for services is 47.3%, up 1.7 percentage points from last month.

The input prices index is 50.2%, down 0.2 percentage points from last month, still above the critical point, indicating that the overall level of input prices for non-manufacturing enterprises has risen. By industry, the input prices index for construction is 50.8%, up 1.1 percentage points from last month; the input prices index for services is 50.1%, down 0.4 percentage points from last month.

The sales prices index is 48.0%, down 1.1 percentage points from last month, indicating a decline in the overall level of sales prices in the non-manufacturing sector. By industry, the sales prices index for construction is 47.4%, down 1.0 percentage points from last month; the sales prices index for services is 48.1%, down 1.1 percentage points from last month.

The employment index is 46.1%, up 0.8 percentage points from last month, indicating a slight recovery in employment conditions in non-manufacturing enterprises. By industry, the employment index for construction is 41.0%, down 0.8 percentage points from last month; the employment index for services is 47.0%, up 1.1 percentage points from last month.

The business activity expectation index is 56.5%, up 0.3 percentage points from last month, indicating that non-manufacturing enterprises' confidence in market development continues to strengthen. By industry, the business activity expectation index for construction is 57.4%, down 0.5 percentage points from last month; the business activity expectation index for services is 56.4%, up 0.5 percentage points from last month.

Huo Lihui, chief statistician at the National Bureau of Statistics Service Industry Survey Center, interprets:

(1) The service sector's prosperity has slightly rebounded. The business activity index for the service sector is 49.7%, up 0.2 percentage points from last month. By industry, the business activity indices for telecommunications, broadcasting, television, and satellite transmission services, monetary financial services, and capital market services are all above 60.0%, indicating a high level of prosperity and rapid growth in business volume; retail and catering industries are in the contraction zone, with low prosperity levels. In terms of market expectations, the business activity expectation index for the service sector is 56.4%, up 0.5 percentage points from last month, indicating that service enterprises are more confident about future market development.

(2) The construction sector's prosperity has significantly rebounded. Due to higher temperatures in some southern provinces recently and enterprises rushing to catch up on construction progress ahead of the upcoming holidays, the business activity index for construction is 52.8%, up 3.2 percentage points from last month, indicating a significant improvement in the construction sector's prosperity. In terms of market expectations, the business activity expectation index for construction is 57.4%, remaining in a high prosperity zone, indicating that construction enterprises are optimistic about recent industry developments

Composite PMI Index Rises to Recent High

In December, the Composite PMI Output Index was 50.7%, an increase of 1.0 percentage points from the previous month, indicating that the production and business activities of enterprises in our country have generally expanded compared to last month.