According to the latest data released by the National Bureau of statistics, the Manufacturing Purchasing Manager Index (PMI) was 47.7% in April, down 2.1 percentage points from the previous month, the lowest since March 2020. Insiders said that the PMI data in April may have touched the low point of this round, and there is a high probability of recovery in May. From the high-frequency data, the biggest impact of the epidemic on the economy is in the past. The bottom of economic growth under the impact of the current round of epidemic may appear in April. From May, the domestic economy began to enter an upward repair period.
According to the statements of many officials of Finance and economics ministries during the festival, in order to keep the economic operation within a reasonable range, the steady growth policy will strengthen the relief and assistance to industries, small, medium-sized and micro enterprises and individual industrial and commercial households seriously affected by the epidemic, speed up the progress of tax rebate and tax reduction, and smooth the industrial chain and supply chain.
PMI continues to fall back to economic lows or in April
“The PMI data in April fully reflects the impact caused by this round of epidemic.” Zhou Guannan, chief analyst of fixed income of Huachuang securities, said that the manufacturing PMI continued to fall in April, and the weakening speed of PMI and various sub items was accelerated. In particular, the logistics was blocked in early April, and the supplier delivery time index rarely fell below 40. Considering that the resumption of work and production has been promoted since mid April, the high-frequency index of demand has shown marginal improvement in late April, and the epidemic situation in Shanghai has improved significantly, the PMI data in April may have reached the low point of this round, and the probability of recovery in May is high.
The bottom of economic growth under the impact of this round of epidemic may appear in April. Fan Lei, chief Macro Analyst of Guolian securities, said that considering that Shanghai has gradually begun to resume work and production, the stage of the greatest impact of the epidemic on the economy is passing. With the continuous increase of policies, economic growth is expected to gradually pick up in the future.
“The policy has warmed up in an all-round way, and the economic bottom has appeared.” Gao Ruidong, chief macro economist of Everbright Securities, said that the recent epidemic situation in Shanghai tends to ease, the resumption of work and production of key enterprises has been continuously promoted, and the smooth and stable chain has been gradually solved. The meeting of the Political Bureau of the CPC Central Committee held a few days ago made a series of positive arrangements on real estate, platform economy and infrastructure, comprehensively expanded domestic demand and injected a booster into the real economy and capital market.
Guosen Securities reported that considering that there may be a certain lag in the negative impact of the epidemic on the economy, the impact of the epidemic on the domestic economy in April was greater than that in March. Under the current easing of the epidemic situation, the low point of economic growth this year may appear in April. From May, the domestic economy began to enter the upward repair period, and the economic probability will return to normal in June.
Some indicators improved and economic growth is expected to rebound
It is worth noting that some high-frequency data and leading indicators have released signs of recovery in the current economy.
Under the background of policy support and Shanghai’s promotion of resumption of work and production, the national vehicle freight logistics index has improved to a certain extent. High frequency data showed that on April 28, the national vehicle freight logistics index rebounded by 30% compared with the low point on April 6, and the data in the third week of April had stabilized compared with the second week.
From the perspective of the expected index, according to the data of the National Bureau of statistics, the expected index of production and operation activities and the expected index of non manufacturing business activities in April remained in the boom range, indicating that most enterprises are still confident in the market trend.
Zhao Qinghe, Senior Statistician of the service industry survey center of the National Bureau of statistics, said that recently, relevant departments have further coordinated epidemic prevention and control, smooth logistics and supply, and strengthened various policies such as helping enterprises to rescue, which is conducive to stabilizing the confidence of market players. With the effective control of the epidemic and the emergence of policy effects, enterprises are expected to gradually improve.
The agency expects the economy to rebound in May and June. Ming Ming, the joint chief economist of CITIC Securities, believes that with the decline of the impact margin of the epidemic and the increase of policy support, economic development will gradually tend to be normal. The economic growth rate will bottomed out in April and is expected to rebound from May to June. Referring to the experience of 2020, the rebound speed and range of industry will be greater than that of consumption and contact service industry.
According to the report of Guosen Securities, considering the overweight effect of steady growth policy and compensatory growth, the economic growth is expected to reach 6% year-on-year in June.
The policy of promoting steady growth will work in multiple directions
In order to keep the economic operation within a reasonable range, the relevant heads of the national development and Reform Commission, the Ministry of finance, the Ministry of industry and information technology and other ministries and commissions disclosed the next macro policy trend in an interview with Xinhua News Agency reporters a few days ago.
“In the next step, we will put steady growth in a more prominent position, effectively coordinate epidemic prevention and control and economic and social development, and accelerate the implementation of the determined policies. We will actively respond to unexpected changes, step up the planning of incremental policy tools, strengthen contingent regulation, and strive to stabilize the macro-economic market.” Zhao Chenxin, member of the Party group and Secretary General of the national development and Reform Commission, said that we should further promote the measures to revitalize the operation of the industrial economy and promote the high-quality development of industry, implement the policies and measures to promote the recovery and development of difficult industries in the service industry, strengthen the relief and assistance to industries seriously affected by the epidemic, small, medium-sized and micro enterprises, individual industrial and commercial households, and refine and implement the determined fiscal, tax and financial support policies. Study and take greater measures to promote the opening of service enterprises as far as possible.
Tax rebate and reduction is a key measure to stabilize the macro-economic market. Xu Hongcai, Vice Minister of finance, said that at present, various tax rebate, tax reduction and fee reduction policies are being accelerated. In May, the remaining tax amount of small and medium-sized enterprises will be refunded in advance, and then the tax refund progress of large enterprises will be accelerated. In addition to the newly introduced large-scale retention tax rebate policy this year, the previously introduced and implemented retention tax rebate policy is also being handled normally and accelerated.
Special debt is an important starting point of fiscal policy this year. Xu Hongcai expects that all localities will complete the issuance of most of the new special bonds in the second quarter and complete the liquidation in the third quarter.
“To stabilize industrial growth, we should take unblocking the industrial chain and supply chain as the primary task, go all out to ensure smooth and stable industrial chain circulation. This is an urgent task and the top priority.” Xin Guobin, Vice Minister of the Ministry of industry and information technology, said that it is necessary to implement the “white list” system of supply chain enterprises in key industrial chains, ensure the stable production of key enterprises, and strive to get through the blocking points in some places. At the same time, we should go all out to help enterprises rescue, expand domestic demand and stabilize expectations. Promote the implementation and effectiveness of the policies that have been issued, formulate and improve the response plan and take effective measures in time according to the actual difficulties faced by enterprises in production and operation and the possible new situations and challenges.