In February, both supply and demand shrank significantly, and manufacturing PMI fell to 35.7%. Due to the novel coronavirus pneumonia spread across the country, enterprises in various places have delayed starting to resume work, and the turnover rate and utilization rate of workers have started to decline, and manufacturing activities have tightened. The production index is 27.8%, down 23.5% compared with the previous month; the purchasing volume index is 29.3%, down 22.3% compared with the previous month; the employee index is 31.8%, down 15.7% compared with the previous month. The spread of the epidemic led to the contraction of consumer demand, and the delay of enterprises resumption of work further led to the slowdown of demand in the upstream and downstream of the supply chain. The new orders index was 29.3%, down 22.1 percentage points from the previous month. External demand also contracted, with the new export orders index at 28.7%, down 20 percentage points from last month.
The market price is relatively stable, the price of raw materials keeps rising but the growth rate slows down, and the factory price tends to decline. Due to the supply chain enterprises delay in starting and resuming work, the supply of raw materials is tight, and the logistics is limited due to the protection and control measures in various regions, the price of raw materials has increased, and the purchase price index is 51.4%, 2.4 percentage points lower than last month, which is in the expansion range. The decline in market demand and logistics constraints also affected the sales of enterprises. The ex factory price index was 44.3%, down 4.7 percentage points from the previous month, and the inventory index of finished products was 46.1%, up 0.1 percentage points from the previous month.
On the whole, this months sharp decline in manufacturing PMI is mainly due to the short-term impact of the epidemic, but the decline is within the expected range, and the overall impact of the epidemic on the economy is short and controllable. From the PMI in January, the economy developed steadily, the market demand expanded faster, and the enterprises expected to be better. This steady and good momentum of development, affected by the epidemic, saw a short break in the first quarter. After the basic control of the epidemic, it is expected that the steady and good development momentum of the economy will continue, and the pent up demand under the epidemic will be released intensively. Enterprises will seize the pain point of resumption of work and production, expand production as soon as possible, and accelerate the recovery growth of investment, consumption and export.