August PMI shows the shrinking of the export orders

The Purchasing Management Index of China (PMI) posted in September 1 shows that, the export orders index for August was 48.3%, dropped 2.1 % from the previous month, which is the first time the figure fell (lower than 50%) since May 2009, amid export order index for 10 industries including textile, transportation, equipment manufacturing, wood processing and furniture manufacturing were lower than 50%.

An insider said that many industries are undergoing difficulties because of such factors like current faltering economy, price hikes of raw materials, RMB appreciation and the anticipation that developed countries are increasing the import duty.

“It used to be busy season the same time in the previous years, yet this year the orders are still in depression.” Said Yang Yuping, Dayangfeng Textile Company of Zhangjiagang. Since March 2011, there was a sharp decline of export orders for textile industry, no upward inflection since then. Christmas is approaching soon, right now is supposed to be the busy season for textile industry, in fact, there are not much orders. For some of the small enterprises, even though they get orders, they can hardly fulfill the orders, on account of low profit or lack of labor force.

According to Guotai Junan Securities, the growth speed of China’s export in August was 19 percent, lower than the figure in July 20.35 percent. Li Xunlei, the chief analyst of Guotai Junan Securities, estimated that the export growth speed will be continue falling in the second half of the year, by the end of the year, the monthly growth speed could reach15 percent. Even though the export growth speed is falling, yet the nation’s macro adjustment and control policy will not change, for the economy is still booming.

According to statistics, PMI for August was 50.9 percent, saw a slight growth of 0.2 percent from the previous month, and terminated the downward trend lasted for 4 months. This also indicated that the economy is adjusting back gradually.

CTEI