Earlier this week we had the official PMIs from China for December:
The manufacturing PMI disappointed, but non-manufacturing jumped solidly higher:
Today we get the second of China's monthly manufacturing PMIs, from Caixin/S&P Global, due at 0145 GMT, which is 2045 US Eastern time:
Ahead of the official PMIs I posted about the differences between the official and the Caixin PMIs. ICYMI, here it is again.
The PMIs (Purchasing Managers' Indexes) from China's National Bureau of Statistics (NBS) and Caixin/S&P Global differ primarily in survey scope, methodology, and focus. Here's a breakdown of the key differences:
1. Provider and Affiliation
NBS PMI:
- Compiled by the National Bureau of Statistics of China, a government agency.
- Seen as the official PMI, closely aligned with government policies and priorities.
Caixin/S&P Global PMI:
- Compiled by Caixin Media in collaboration with S&P Global.
- A private-sector index, often considered more market-driven.
2. Survey Scope
NBS PMI:
- Focuses on large and state-owned enterprises.
- Covers a broader range of industries, including manufacturing and non-manufacturing sectors (e.g., construction and services).
- Reflects conditions in sectors heavily influenced by government policies and infrastructure spending.
Caixin PMI:
- Focuses on small to medium-sized enterprises (SMEs), particularly in the private sector.
- Captures the performance of companies that are more exposed to market-driven forces and less influenced by state interventions.
3. Sample Size and Composition
NBS PMI:
- Larger sample size, with about 3,000 enterprises surveyed for the manufacturing PMI.
- Emphasizes state-owned enterprises and larger companies, which tend to dominate traditional industries.
Caixin PMI:
- Smaller sample size, surveying around 500 enterprises, with a stronger focus on export-oriented and technology-driven firms.
- Provides insights into the private sector and its responsiveness to global economic conditions.
4. Release Dates
NBS PMI:
- Released monthly, typically on the last day of the month.
- Provides separate PMIs for manufacturing and non-manufacturing sectors.
Caixin PMI:
- Released a few days later, usually on the first business day of the following month.
- Includes only the manufacturing PMI and services PMI, with no equivalent for non-manufacturing activities like construction.
5. Interpretation and Use
NBS PMI:
- Reflects the overall economic landscape, especially trends in industries influenced by government policy.
- Analysts use it to gauge the impact of fiscal and monetary policies on the broader economy.
Caixin PMI:
- Viewed as a better indicator of the health of the private sector and market-driven segments of the economy.
- Considered more sensitive to external shocks (e.g., global trade conditions).
6. Key Insights and Differences in Results
- The NBS PMI often reflects policy-driven stability, showing less volatility because it covers sectors cushioned by government support.
- The Caixin PMI can be more volatile, as SMEs are more sensitive to real-time changes in market demand, supply chain disruptions, and global economic shifts.
Why Both Matter:
- NBS PMI offers a macroeconomic view of China's state-influenced economy.
- Caixin PMI provides a microeconomic perspective of the more market-driven and globally competitive sectors.
By analyzing both, investors and policymakers can obtain a more comprehensive picture of China's economic health and its underlying dynamics.
