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COVID-19 Hurts China’s PMI
2020-03-10 08:47chinapaperonline.com
(www.chinapaperonline.com) Reports from China National Statistics Bureau (CNSB) showed the country’s PMI tumbled 14.3 percentage points from January to 35.7 in February, as New Order Index – one of the key components of PMI - suffered the biggest drop and fell to the lowest since July 2019. With the exception of medical equipment and appliance industry, production and business operations in many other manufacturing industries in China came to a halt or at the least runs during the month. In particular, PMI of chemical fiber, general equipment, specialty equipment and automobile industries fell below 30.

Significant slowdowns in logistics and cancellation of export orders also added to the declines. Mobility restriction resulted in insufficiency of workforce in factories across the country, while delays in deliveries threatened manufacturer’s material stocks and finished product shipment.

With more businesses resuming operation and mills gearing up production, more people are now hopeful of economic rebounds in the post COVID-19 months ahead. Since February 25, 85.6% of the large and mid-size manufacturers in China have resumed production, according to CNSB, which compiled its PMI through averaging 13 monthly indicators from surveys to 3,000 manufacturers and 4,000 non-manufacturers in the country with questionnaires covering production, new domestic and export orders, etc.

From February 2019, China’s monthly PMI was able to stay or around 50, with the highest at 50.5 and the lowest at 49.2. The dramatic fall to 35.7 in February 2020 was widely believed as the stagnation of economic activities under the impact of COVID-19.

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