CN: CFLP Manufacturing PMI

Fri Sep 29 20:00:00 CDT 2017

Consensus Actual Previous
CFLP Mfg PMI 51.6 52.4 51.7

China's CFLP Manufacturing PMI headline index rose from 51.7 in August to 52.4 in September, above the consensus forecast of 51.6 and the highest level since 2012.

The increase in the manufacturing headline index reflected an advance in the production index from 54.1 in August to 54.7 in September, although there was a small drop in the survey's measure of business expectations from 59.5 to 59.4. The new orders index rose from 53.1 to 54.8, while the new export orders index advanced from 50.4 to 51.3.

Also released today, the CFLP Non-Manufacturing PMI headline index advanced from 53.4 in August to 55.4 in September, its highest level since 2014.

The increase in the CFLP Manufacturing PMI headline index contrasts with the Caixin Manufacturing PMI survey for September, also released today, which showed a decline in the headline index from 51.6 in August to 51.0 in September.

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.