Research Group of Small and Micro-sized Enterprise Operating Index

I. SMEOI remained unchanged from last month within the contraction range

In December 2023, the Economic Daily – PSBC Small and Micro-sized Enterprise Operating Index (Fig. 1, hereinafter referred to as “SMEOI”) reported 49.4, the same as the previous month. The index stayed within the contraction range for three month since October. However, the continuing decline since August ended this month, marking that the overall performance of micro and small enterprises began to stabilize.

Fig. 1 Economic Daily – PSBC SMEOI 

II. Two out of the eight subindices increased, five decreased, and one remained unchanged, with the financing index and cost index rising slightly

Two out of the eight subindices increased, five decreased, and one remained unchanged in October (Fig. 2). Specifically, the market index was 50.3, up 0.4 point; the purchasing index stood at 49.6, up 0.2 point; the performance index registered 49.4, on par with last month; the expansion index read 48, down 0.3 point; the confidence index posted 51.4, down 0.3 point; the financing index recorded 48.1, down 0.6 point; the risk index closed at 48.4, down 0.3 point; and the cost index was 46.6, down 0.6 point.

Among the eight subindices, the market index and confidence index stayed within the range of prosperity, indicating that the market was moving upward and the confidence of micro and small enterprises was increasing. The purchasing index increased from the previous month, but still ran below the threshold, indicating that the purchasing level continued to decline but at a narrowing pace. The performance index was flat with the previous month and continued to run below the threshold. The expansion index, financing index, risk index and cost index all continued to decline below the threshold, indicating that enterprises experienced weakening expansion, decline in financing level, and expanding rise in operational risk and costs. As for subindices, the bookings index increased by 0.4 point compared with the previous month; the next-period financing demand index and the financing difficulty index decreased by 0.4 point and 0.7 point respectively compared with the previous month; the liability ratio index, the payment collection cycle index and the working capital turnover index dropped 0.4 point, 0.2 point and 0.1 point respectively from the previous month.

Fig. 2 Subindices of Economic Daily – PSBC SMEOI

In term of the trend over the past 12 months, the confidence index stayed above the boom threshold more frequently, which reflected the rising confidence of micro and small enterprises; the purchasing index and market index ran above the boom threshold more frequently than other subindices, indicating that the micro and small enterprise market was in good condition and the purchasing level was steadily improving. 

III. Three out of the six regional indices increased, and the other three decreased, with Northwest China rising the most

Three out of the six regional indices increased, and the other three decreased (Fig. 3). Specifically, the North China index reported 48.7, up 0.2 point; the Northeast China index registered 48.5, down 0.4 point; the East China index read 49.1, down 0.4 point; the Central & South China index posted 50.1, up 0.3 point; the Southwest China index decreased by 0.3 point to 49.6; and the Northwest China index rose by 0.4 point to 49.6.

Fig. 3 Regional Development Index

In December, only the Central & South China index ran above the boom threshold from below, indicating that the overall performance of micro and small enterprises in the region turned from a decline to rising trend, which was mainly reflected in the expansion of market demand, the increase of purchasing level and the improvement of corporate performance. The North China and Northwest China indices rose below the threshold, indicating worse operation of micro and small enterprises in the two regions, but with a narrowing trend.

IV. Three out of the seven industry indices increased, three decreased, and the remaining one remained unchanged, with the transportation industry index falling the most

Three out of the seven industry indices increased, three decreased, and the remaining one remained unchanged (Fig. 4). Specifically, the index of the agriculture, forestry, animal husbandry & fishery industry reported 49.2, up 0.1 point; that of the manufacturing industry posted 49.8, the same as last month; that of the construction industry stood at 47.5, down 0.5 point; that of the transportation industry registered 48.3, down 0.7 point; that of the wholesale & retail industry went up by 0.2 point to 49.9; that of the accommodation & catering industry decreased by 0.2 point to 49.1, and that of the service industry reported 49.5, up 0.2 point.

Fig. 4 Comparison of Industry Indices

In December, the agriculture, forestry, animal husbandry & fishery industry, wholesale & retail industry and service industry went up under the boom threshold, indicating an improvement in operation of micro and small enterprises in the three industries. The construction industry, transportation industry, and accommodation & catering industry declined below the threshold, indicating that the operating conditions of micro and small enterprises in the three industries underwent certain pressure, with operational risk under focus. The index of manufacturing industry remained unchanged from last month, but the situation began to stabilize, which was mainly reflected in improved market performance. However, there were still issues such as insufficient expansion impetus.

Notes:

All indicators are positive indicators, with a value range of 0-100, and 50 as the critical point representing the general condition. An index above 50 indicates positive conditions of enterprises, while an index below 50 indicates the downward trend of enterprises.

Both the risk index and the cost index are adjusted to positive indicators based on the raw data. The larger the index value, the better the situation.