In May, the basic structure of the US economy remained weak. Although real estate and infrastructure remain stable, manufacturing will be dragged down. It is expected that the industrial added value and investment growth rate will hardly improve significantly, and the chain is basically the same as last month. Affected by this, credit demand is weak, and credit and social financing difficulties have increased significantly. The growth rate of social financing scale is expected to be 10.5%, with a slight increase of 0. 1 percentage point from the previous month. In terms of prices, CPI will continue to rise or reach the high point of the year, and PPI is still expected to maintain positive growth.
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▌ Industry: High-frequency data are mixed, and it is expected that the growth rate of industrial added value will remain low. In May, the operating rate of blast furnace was further improved compared with that of last month, and it basically operated at around 70%. According to Mysteel data, the growth rate of crude steel production has also maintained a good level, or it is related to the new construction of real estate and good construction performance in May. On the other hand, the coal consumption of the six major power plants increased by-18.9% year-on-year, with an obvious decline (-5.3% in April). Despite the high base in the same period last year, the overall performance is still not satisfactory. Based on our judgment on the overall manufacturing investment and export prosperity, it is estimated that the growth rate of industrial added value will remain low in May, with an expected 5.5%.
▌ Investment: Real estate and infrastructure are still supported, and the growth rate of investment in fixed assets is expected to be 6.2%. From the observation of high-frequency data, crude steel output, newly started area, construction growth rate and soil auction heat all maintain a good level, so the sustainability of real estate investment will remain at a high level in the short term (it is expected that there will still be a double-digit growth rate in May), thus stimulating the overall fixed asset investment to maintain the recent growth rate; From the perspective of infrastructure, we judge that the continuous ring-on-ring repair will continue, but due to the funding, the ring-on-ring improvement is expected to be limited; From the perspective of manufacturing industry, the overall pressure was outstanding in May, which was obviously disturbed by economic and trade frictions. Combined with PMI and other indicators, we judge that it will remain at a low level. On the whole, it is estimated that the growth rate of fixed assets investment will increase slightly by 0. 1 percentage point compared with last month, which is 6.2%.
▌ Consumption: The May Day holiday will lead to a significant rebound in consumption growth. Affected by holiday factors, consumption in May is expected to improve year-on-year and month-on-month. The main factors are as follows: 1) The resumption of the May Day holiday has increased the number of holiday days in May this year compared with the same period of last year, which has boosted the consumption growth in May; 2) Move to May after the "May Day" holiday, so as to promote the synchronous backward movement of consumption. Last year, the May Day holiday lasted for two days in April, but this year's holiday only started in May. At the same time, it is expected that automobile consumption will continue to drag down the overall consumption due to the switch of five countries and six countries, but the decline may be slightly narrowed. Overall, it is estimated that the total retail sales of social consumer goods will increase by 8.9% in May.
▌ Import and export: domestic and foreign demand is weak, and the increase in taxes and upgrades has dragged down the growth rate of import and export. In May, domestic and international demand performance remained weak. In May, China's manufacturing PMI fell back to the threshold of 49.4%. However, the PMI of the United States continues to fall, and Europe and Japan are still below the threshold. At the same time, Sino-US economic and trade frictions heated up again in May, and the United States imposed tariffs on goods worth $200 billion on China by 15 percentage points, which was implemented on 10. It is expected that weak demand and tax increase will further reduce the growth rate of export value to -5% in May, and the growth rate of import will be -2% (in US dollars).
▌ Price level: CPI may rise to the highest point in the year, and PPI will continue to rise. In May, pig prices continued to rise month-on-month, and the previous de-capacity has continued to boost prices. On the other hand, the data of the Ministry of Agriculture and Rural Affairs showed that the price of fresh vegetables continued to fall in May, but it was also the base reason or the price of CPI fresh vegetables continued to rise year-on-year. Considering the low base in the same period last year, food prices will be the most important factor pushing up inflation to the high point of the year. In terms of non-food, the weakness of economic fundamentals in April and May will still restrict the obvious warming of non-food prices. On the whole, we think that CPI may rise to around 2.8% in May, which is the highest value in the year. At the level of industrial products, we believe that the PPI in May will be significantly lower than the previous value of 0.3%, and the year-on-year growth rate may be around 0.4%.
▌ Financial data: It is estimated that the growth rate of social finance will be slightly increased to 10.5% before M2 is flat. In terms of social integration, we expect the growth rate of social integration to rebound slightly by 0. 1 percentage point from last month to 10.5%, and the increase in that month may be 1. 18 trillion, higher than the level of 0.95 trillion in the same period last year. At the same time, the overall financial environment became loose in the first half of May and tightened in the second half. We believe that the overall growth rate of M2 will be maintained at around 8.5%, while M 1 is unlikely to rebound obviously, and will still operate at a low level.
main body
▌ Economic data: The fundamentals are still weak, and the performance is basically the same as last month.
Industry: High-frequency data are mixed, and the growth rate of industrial added value remains low.
In May, the PMI index returned to the contraction range, and SMEs were obviously dragged down by external factors. In May, the PMI of China's mining manufacturing industry decreased by 0.7 percentage points from the previous month to 49.4%, among which new orders, production and employees all decreased in different degrees (-1.6, -0.4 and -0.2 percentage points). From the perspective of enterprise types, the PMI of large, medium and small manufacturing enterprises in May was 50.3%, 48.8% and 47.8% respectively, among which the PMI of small and medium-sized enterprises continued to operate below the threshold, and the environment was worse than that in April, which also reflected the expected changes brought about by the intensification of Sino-US economic and trade frictions since May. We believe that the industrial performance of small and medium-sized enterprises and export-oriented enterprises will be significantly lower than previously expected in May, which will drag down the overall industrial performance.
The high-frequency data is mixed, and it is expected that the growth rate of industrial added value will remain low in May. From the observation of high frequency data, the operating rate of blast furnace in May was further improved compared with last month, and it basically operated at around 70%. According to Mysteel data, the growth rate of crude steel production has also maintained a good level, or it is related to the new construction of real estate and good construction performance in May. On the other hand, the coal consumption of the six major power plants increased by-18.9% year-on-year, with an obvious decline (-5.3% in April). Despite the high base in the same period last year, the overall performance is still unsatisfactory. Based on our judgment on the overall manufacturing investment and export prosperity, it is estimated that the growth rate of industrial added value will remain low in May, with an expected 5.5%.
Investment: Real estate and infrastructure are still supported, and the investment in fixed assets is expected to increase by 6.2%.
In terms of investment in fixed assets, from the observation of high-frequency data, crude steel output, newly started area, construction growth rate and soil auction heat all maintain a good level, so the sustainability of real estate investment will remain at a high level in the short term (it is expected that there will still be a double-digit growth rate in May), thus stimulating the overall investment in fixed assets to maintain a recent growth rate; From the perspective of infrastructure, we judge that the continuous ring-on-ring repair will continue, but due to the limited funds, the ring-on-ring improvement is expected to be limited; From the perspective of manufacturing industry, the overall pressure was outstanding in May, which was obviously disturbed by economic and trade frictions. Combined with PMI and other indicators, we judge that it will remain at a low level. On the whole, it is estimated that the growth rate of fixed assets investment will increase slightly by 0. 1 percentage point compared with last month, which is 6.2%.
Consumption: The May Day holiday will lead to a significant rebound in consumption growth.
Import and export: domestic and foreign demand is weak, and the superposition of tax increase and upgrading drags down the growth rate of import and export.
On the export side, the demand performance of major trading countries is still weak. Among them, the manufacturing PMI of the United States decreased by 2.5 percentage points to 52.8% in April compared with March, and the manufacturing PMI of the euro zone of Japan rebounded slightly in April compared with March, but turned down in May, still below the dry line. At the same time, Sino-US economic and trade frictions heated up again in May, and the United States imposed tariffs on goods worth $200 billion on China by 15 percentage points, which was implemented on 10. Through the investigation at the grass-roots level, it is found that China's export enterprises don't have enough preparation time because of the fast implementation time of tariff increase in the United States. Moreover, the tax rate increased from 10% to 25%, which further impacted the profit margin of enterprises. After the tariff fell, some enterprises decided to close their factories. Therefore, the tax increase and escalation will further drag down the export growth rate. Of course, it should not be ignored that the United States further threatened to impose tariffs on the remaining $300 billion of goods. According to last year's experience, there may be an escape tide for listed goods, which will support exports to some extent. Overall, it is expected that the growth rate of export value will drop slightly to -5% in May. (USD)
On the import side, PMI imports in May decreased by 2.6 percentage points from the previous month to 47. 1%. We had previously judged that the domestic economy bottomed out in the second quarter, so it is expected that domestic production demand will continue to fall in May compared with April, thus dragging down the growth rate of imports. In addition, the price of Brent crude oil fell by about 1 1% in May. Although the Baltic Dry Index (BDI) rebounded slightly, the overall import volume may decline. It is estimated that the growth rate of import value in May will be -2%. (USD)
▌ Price: CPI may rise to the highest point in the year, while PPI will rise.
The utility of pig price superposition base is low or the CPI will be pushed up to the highest point in the year. High-frequency data show that pig prices continued to rise in May, and the previous de-capacity has continued to boost prices. On a year-on-year basis, pig prices turned positive in March, rising for two consecutive months. In May last year, the base was the lowest in the year, and it is expected that the year-on-year increase in pig prices will continue to widen. On the other hand, the data of the Ministry of Agriculture and Rural Affairs show that the price of fresh vegetables continued to fall in May, but it was also the base reason or the CPI fresh vegetable price continued to rise year-on-year. Recently, the price of fruit has increased significantly. For example, according to the data of the Ministry of Agriculture and Rural Affairs, the average week-on-week increase in the price of apples has risen to the highest value since 10. Generally speaking, the increase in food prices will continue in May, and there is no marginal cooling trend. Considering the low base in the same period last year, food prices will be the most important factor to push up inflation to the high point of the year. In terms of non-food, the international crude oil price in May fell month-on-month and sharply year-on-year, which suppressed the transportation price to some extent. The weakness of economic fundamentals in April and May will still restrict the obvious recovery of non-food prices. On the whole, we think that CPI may rise to around 2.8% in May, which is the highest value in the year.
The PPI fell from the previous month, and the year-on-year increase was difficult to exceed April. In April, PPI increased by 0.9% year-on-year, which was the highest value in the year we had previously judged. A series of high-frequency data show that the prices of industrial products continued to be weak in May. The price of black is positive, but the increase is narrower than the previous value; The month-on-month decline of non-ferrous and petrochemical products continued to expand, and only the negative growth of coal prices was narrower than the previous value. It can be seen from the performance of PMI that it has fallen below the dry line in May. Affected by insufficient demand, weakening of policy stimulus margin and uncertainty of trade war, industrial production is still weak. Overall, we believe that the PPI in May will be significantly lower than the previous value of 0.3%, and the year-on-year growth rate may be around 0.4%.
▌ Financial data: M2 is expected to be 8.5% of last month, and the growth rate of social financing will remain stable.
Credit level: Credit demand was weak in May, and the total amount of RMB loans decreased slightly from the previous month.
In April, RMB loans increased by 1.02 trillion yuan, the first monthly year-on-year growth in the past year. From the fundamentals in May, the confidence of manufacturing enterprises was suppressed to a certain extent, while the infrastructure construction in the same period was still in a moderate repair period, which failed to significantly support credit. Based on a comprehensive judgment, we think that the overall new credit supply in May will still be lower than the same period of last year (2065438+1./KLOC-0.5 trillion yuan in May 2008), which is about 900 billion yuan, and the proportion of corporate loans will be suppressed. However, from the perspective of residents' credit, although the housing market has cooled down in the second half of May, the overall level is still high. We believe that residents' medium and long-term loans will remain at a good level in that month.
Scale of social integration: the growth rate will remain stable or reach 10.5%.
In terms of social financing, the total amount of new social financing in April was 1.36 trillion yuan. Looking forward to the data in May, we expect the growth rate of social financing scale to rebound slightly by 0. 1 percentage point from last month to 10.5%, and the increase in that month may be 1. 18 trillion, higher than the level of 0.95 trillion in the same period last year.
In terms of sub-items, in terms of on-balance-sheet financing, it is estimated that the new local and foreign currency loans may be 900 billion yuan; In terms of direct financing, the market performance was flat in May, and credit bond financing maintained a net growth but the total amount was low. It is estimated that credit bond financing and stock market financing signed 50 billion yuan in the month. In terms of local special bonds, according to the preliminary statistics of Wind and the adjustment of overlapping caliber, the estimated net circulation is 654.38+050 billion yuan, which will continue to contribute to the net growth of social integration; In terms of off-balance sheet financing, based on maturity judgment, it is estimated that the portfolio of entrustment, trust and undiscounted acceptance bills may remain slightly negative, or-50 billion yuan; As for other financing, combined with our forecast on the scale of ABS issuance of banks, it is estimated that the overall amount may be 654.38+030 billion yuan.
Broad money supply: M2 economic growth rate is expected to be the same as last month, at 8.5%.
In terms of broad money supply, the overall supervision remained relatively loose in the first half of May, but it was obviously tightened in the second half. At the end of the month, the liquidity of the interbank market was slightly tense due to events such as the overlapping of contractors' banks. Looking at the whole month, the growth rate of off-balance sheet financing has stabilized or continued slightly, but the range is not large. M2 is expected to be the same as last month, with an increase of around 8.5%. In terms of M 1, the profit data of industrial enterprises in June 5438+0-April shows that corporate profits are still under pressure, and the improvement is expected to be limited in May, and it is expected to remain low.
This article is taken from the report "Outlook of Economic and Financial Data in May 20 19: Fundamental data is still weak, and inflation may usher in the highest point of the year" released by CITIC Securities Research Department on June 3, 20 19. For detailed analysis, please refer to relevant reports (including relevant risk warnings). If there is any ambiguity due to the excerpts of the report, the complete contents on the date of publication of the report shall prevail.
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