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In June 2013, the China Manufacturing Purchasing Managers' Index (PMI), released by the China Federation of Logistics and Purchasing and the National Bureau of Statistics Service Industry Survey Center, stood at 50.1%, marking a decrease of 0.7 percentage points from the previous month. Among the 12 sub-indices, most showed declines, with several falling by more than two percentage points. Specifically, the import expectations, backlogged orders, purchase volume, and production activity indices dropped by over 2 percentage points. The production index, new orders, and new export orders each fell by more than 1 percentage point, while others declined by around 1 percentage point.
Looking at enterprise size, large enterprises maintained a PMI above 50% at 50.4%, while small and medium-sized enterprises recorded 49.8% and 48.9% respectively, indicating contraction in their operations.
Analyst Zhang Liqun commented on the survey results, stating that the decline in the PMI suggests some downward pressure on the economy. However, the index remained above the 50% threshold, signaling continued expansion. He noted that investment and consumption growth had been stable from January to May, and excluding the impact of speculative capital flows, export growth had not dropped sharply. Additionally, low inventory levels limited further declines, and the overall economic stabilization effect was still visible.
The new orders index for June was 50.4%, down 1.4 percentage points from the prior month. While 21.8% of companies reported an increase in new orders, this was 4 percentage points lower than the previous month. Meanwhile, 24.2% of firms saw a reduction in orders, up 3.8 percentage points from the previous month.
The production index fell to 52.0%, a drop of 1.3 percentage points. Only 24.3% of companies reported increased output, down 4.2 percentage points, while 22.5% experienced a decline, up 4.2 percentage points.
The raw material inventory index slightly decreased to 47.4%, down 0.2 percentage points. Despite this, 12.5% of companies reported higher raw material stocks, a 1 percentage point drop from the previous month.
The employee index also declined slightly, reaching 48.7%, down 0.1 percentage points. Only 5.0% of firms reported more employees, a drop of 1.4 percentage points, while 86.8% remained flat, up 1.8 percentage points.
The purchase price index fell to 44.6%, down 0.5 percentage points. Just 7.2% of companies saw rising prices, a slight decrease from the previous month.
In response to the survey, many manufacturers reported challenges. 47.0% of firms cited insufficient orders, up 4.3 percentage points. Labor costs rose for 45.4% of companies, and 40.9% faced tight capital conditions. The renminbi’s appreciation was noted by 13.6% of respondents, up 0.9 percentage points. On a positive note, 16.7% reported rising raw material prices, down 1.3 percentage points, and 26.5% saw higher transportation costs, a decrease of 1 percentage point.
The PMI is a key indicator used to assess manufacturing health. It is derived from monthly surveys of purchasing managers across 31 major manufacturing industries, covering areas like production, orders, inventory, and employment. The survey sample expanded to 3,000 companies in 2013. Each month, data is collected using a PPS sampling method, ensuring representation based on industry size and revenue. The PMI composite index is calculated by weighting five key sub-indices: new orders (30%), production (25%), employees (20%), supplier delivery time (15%), and raw material inventory (10%). Seasonal adjustments are applied to ensure accurate trend analysis.