CN: CFLP Manufacturing PMI

Thu Mar 30 20:00:00 CDT 2017

Consensus Actual Previous
CFLP Mfg PMI 51.8 51.8 51.6

China's CFLP Manufacturing PMI headline index rose to 51.8 in March from 51.6 in February, in line with the consensus forecast. The headline index has now been above 50.0, indicating stronger activity in the manufacturing sector, for eight consecutive months.

The increase in the headline index reflected advances in all major components. The production index increased from 53.7 in February to 54.2 in March, the new orders index rose from 53.0 to 53.3, and the new export orders index picked up from 50.8 to 51/0. The employment index, meanwhile, signalled a shift from modest job losses to no change in payrolls, rising from 49.7 to 50.0.

Also released today, the CFLP Non-Manufacturing PMI headline index advanced from 54.2 in February to 55.1 in March.

The Caixin Manufacturing survey for February will be released early April.

China Federation of Logistics and Purchasing (CFLP) Manufacturing Purchasing Managers Index (PMI) is the monthly survey of about 800 purchasing managers that is conducted jointly by CFLP and National Bureau of Statistics (NBS). The questions focus on the health of the manufacturing sector. The numeric result is a diffusion index. A reading above 50 indicates that manufacturing is growing. A reading below 50 indicates contraction.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures. The CLFP manufacturing data give a detailed look at the manufacturing sector, how busy it is and where things are headed. Since the manufacturing sector is a major source of cyclical variability in the economy, this report has a big influence on the markets. And its sub-indexes provide a picture of orders, output, employment and prices. The survey tends to have a greater impact when it is released prior to the HSBC/Markit manufacturing PMI because the two reports are correlated.