Micro and small enterprises maintained steady development with a rising confidence index

Research Group of Economic Daily – PSBC Small and Micro-sized Enterprise Operating Index

The Economic Daily – PSBC Small and Micro-sized Enterprise Operating Index (SMEOI) (See Fig. 1)reported 44.1in February 2021, remaining unchanged compared with last month.

Fig. 1 Economic Daily– PSBC SMEOI

Among the eight component indices (See Fig. 2), three indices went up, two remained unchanged, and three went down. Specifically, the market index was 39.5, down 0.1 point. The purchasing index stood at 42.1, down 0.1 point. The performance index registered 44.3, down 0.1 point. The expansion index registered 42.6,on par with last month. The confidence index posted 41.4, up 0.4 point. The financing index recorded 52.8, on par with last month. The risk index recorded 48.9, up 0.1 point; and the cost index was 63.2, up 0.6 point.

Fig. 2 Component Indices of Economic Daily – PSBC SMEOI

I. One of the seven industry indices went up, four remained unchanged, and the other two went down.

Among the industry indices(See Fig. 3),the index of the accommodation & catering industrywent up,the index of the agriculture, forestry, animal husbandry & fishery industryand the index of the wholesale & retail industry declined, and the indicesof other industries were all on par with last month.

Fig. 3 Comparison of Industry Indices

The index of the agriculture, forestry, animal husbandry & fishery industry reported 43.4 in February, down 0.1 point. Specifically, the market index reported 39.5, down 0.1 point from the previous month. The purchasing index was 41.2, down 0.1 point; and the performance index was 43.6, on par with last month. Seen from the survey results, SMEs in the industry witnessed a decrease of 0.1 point in the output, order volume and income from principal business, with 0.1 and 0.2 point down in raw material purchase volume and raw material inventory respectively, thus dragging down the profits by 0.1 point and the gross profit margin by 0.1 point, respectively.

The index of the manufacturing industry reported 45.1 in February, on par with last month. Specifically, the market index was 38.6, down by 0.1 point from the previous month. The purchasing index was 39.2, down by 0.1 point; and the performance index was 48.0, down by 0.1 point. Seen from the survey results, SMEs in the industry witnessed a decrease of 0.2 point in the output, order volume, and income from principal business, with 0.3 point down in both raw material purchase volume and raw material inventory, thus dragging down the profits by 0.2 point and the gross profit margin by 0.1 point, respectively.

The index of the construction industry reported 40.7 in February, on par with last month. Specifically, the market index was 37.1 and the purchasing index was 38.3, both on par with last month. The performance index went down by 0.1 point to 41.8. Seen from the survey results, SMEs in the industry witnessed a decrease of 0.2 point in both project volume and amount of new contracts with 0.1 point down in project settlement income, raw material purchase volume and raw material inventory, respectively, thus dragging down the profits by 0.1 point and the gross profit margin by 0.2 point, respectively.

The index of the transportation industry reported 42.9 in February, on par with last month. Specifically, the market index was 40.7, the purchasing index 36.8, both on par with last month; and the performance index went down by 0.1 point to 42.9. Seen from the survey results, SMEs in this industry witnessed a decrease of 0.3 and 0.2 point in transport volume and income from principal business, respectively, while a decline of 0.1 point in raw material purchase volume, thus dragging down the profits by 0.1 point and the gross profit margin by 0.2 point, respectively.

The index of the wholesale & retail industry stood at 45.3 in February, down 0.1 point. Specifically, the market index was 42.2, on par with last month; the purchasing index went down by 0.1 point to 49.0, and the performance index went down by 0.1 point to 42.5. The trend was evidenced by a decrease of 0.1, 0.2 and 0.1 point in sales order volume, sales volume and amount of purchase, thus dragging down the profits by 0.2 point and the gross profit margin by 0.1 point, respectively.

The index of the accommodation & catering industry reported 39.9 in February, up 0.2 point. The market index was 38.6, up 0.3 point. The purchasing index was 38.9, on par with last month. The performance index was 39.9, up 0.2 point. To be specific, SMEs in the industry witnessed an increase of 0.2 point in both business volume and income from principal business with 0.1 point down in raw material purchase volume and 0.1 point up in raw material inventory, and a rise of 0.1 point in both the profits and the gross profit margin.

The index of the service industry reported 41.1 in February, on par with last month. The market index fell by 0.1 point to 36.5, and the purchasing index was 40.9, on par with last month. The performance index went down by 0.1 point to 39.4. To be specific, SMEs in the industry witnessed a decrease of 0.1 point, 0.3 point and 0.1 point in business volume, business order volume, and income from principal business, respectively, with the same purchase volume and inventory of raw materials as last month, thus dragging down the profits by 0.2 point and the gross profit margin by 0.1 point, respectively.

II. Two out of the six regional indices went up, two remained unchanged, and the other two went down.

Among the six regional development indices (See Fig.4), two indices went up, two remained unchanged, and two went down.Specifically, the North China index stood at 41.7, up 0.1 point; Northeast China index at 40.9, up 0.1 point; East China index at 45.1, on par with last month; Central & Southern China index at 46.1, down 0.1 point; Southwest China index at 43.6, down 0.1 point; and Northwest China index at 41.2, on par with last month.

Fig. 4 Regional Development Index

The North China index reported 41.7 in February, up 0.1 point from the previous month. Specifically, the purchasing index was 39.1, up 0.1 point; the expansion index was 37.7, up 0.2 point; the confidence index was 38.2, up 0.5 point; and the financing index was 53.9, up 0.2 point.

The Northeast China index reported 40.9 in February, up 0.1 point from the previous month. Specifically, the performance index was 41.4, up 0.1 point; the expansion index was 38.8, up 0.1 point; the confidence index was 42.3, up 0.4 point; and the financing index was 50.1, up 0.1 point.

The East China index reported 45.1 in February, on par with that in the previous month. Specifically, the market index dropped 0.1 point to 43.1. The purchasing index was 44.8, down 0.1 point. The performance index was 45.6, on par with that in the previous month. The expansion index was 44.0, on par with that in the previous month. The confidence index went up 0.4 point to 41.2. The financing index was 49.2, on par with that in the previous month, and the risk index fell by 0.1 point to 48.5.

The Central & Southern China index reported 46.1 in February, down 0.1 point from the previous month. Specifically, the market index was 43.7, down 0.2 point; the purchasing index was 45.6, down 0.2 point; the performance index was 44.2, down 0.1 point; the expansion index stood at 44.4, down 0.1 point, while the financing index reported 54.8, also down 0.1 point.

The Southwest China index reported 43.6 in February, down 0.1 point from the previous month. Specifically, the market index was 41.5, down 0.1 point; the purchasing index was 44.1, down 0.2 point; the performance index declined 0.1 point to 44.5, while the confidence index was 38.1, on par with that in the previous month.

The Northwest China index reported 41.2 in February, on par with that in the previous month. Specifically, the market index was 37.0, on par with that in the previous month. The purchasing index was 37.0, down 0.1 point; the performance index was 43.9, on par with that in the previous month. The expansion index was 39.6, down 0.1 point; the confidence index was 32.8, up 0.4 point. The financing index was 49.9, on par with that in the previous month, and the risk index was 47.9, up 0.1 point.

III.The financing demand was on par with that in the previous month, while the confidence index went up

The financing index reflecting the financing demand of SMEs (See Fig. 5) was 52.8 in February, on par with that in the previous month.In the month, the financing index of the agriculture, forestry, animal husbandry & fishery industry fell 0.2 point to 50.1; that of the manufacturing industry went up 0.3 point to 54.8; that of the construction industry was 50.4, on par with that in the previous month. The financing index of the transportation industry was 51.7, on par with that in the previous month; that of the wholesale & retail industry declined 0.3 point to 52.0; that of the accommodation & catering industry dropped 0.1 point to 47.4; and that of the service industry edged up 0.1 point to 53.8.

The risk index of SMEs (See Fig. 5)increased 0.1 point to 48.9 in February.To be specific, the risk index of the agriculture, forestry, animal husbandry & fishery industry was 46.2, on par with that in the previous month; that of the manufacturing industry went down 0.1 point to 50.5; that of the construction industry went up 0.4 point to 45.6. The risk index of the transportation industry went down 0.1 point to 43.9; that of the wholesale & retail industry went up 0.2 point to 51.8; that of the accommodation & catering industry went up 0.6 point to 42.9; and that of the service industry edged up 0.2 point to 41.1. Seen from the survey results, the working capital turnover index of the agriculture, forestry, animal husbandry & fishery industry, the manufacturing industry, the transportation industry, and the service industry either went down or was on par with that in the previous month, while the other three industries all generated a slightly fast working capital turnover. The payment collection period index of the agriculture, forestry, animal husbandry & fishery industry, the manufacturing industry, and the transportation industry either climbed or was on par with that in the previous month, while the other four industries all managed to shorten the payment collection period somewhat.

Fig. 5 Financing Index and Risk Index by Industry

In February, the expansion index, which was used to reflect the business expectations of SMEs, was on par with that in the previous month. In an industry-specific view, SMEs in all industries other than the accommodation & catering industry saw their expansion index increasing slightly, and the agriculture, forestry, animal husbandry & fishery industry and the wholesale & retail industry saw their expansion index decreasing slightly, the SMEs expansion index in other industries were all on par with that in the previous month. Specifically, the expansion index of SMEs in the agriculture, forestry, animal husbandry & fishery was 43.1, down 0.1 point, with the new investment demand falling by 0.1 point. The expansion index of SMEs in the manufacturing industry was 44.6, on par with that in the previous month, with the new investment demand falling by 0.1 point. The expansion index of SMEs in the wholesale & retail industry was 43.9, down 0.1 point, with the new investment demand falling by 0.1 point. The expansion index of SMEs in the accommodation & catering industry was 34.6, up 0.1 point with the labor demand increasing by 0.1 point.

Fig 6. Expansion Index and Confidence Index by Industry

The confidence index of SMEs reported 41.4 in February, up 0.4 point from the previous month. In an industry-specific view, SMEs in all industries other than agriculture, forestry, animal husbandry & fishery saw their confidence index going up slightly. To be specific, the confidence index of SMEs in the manufacturing industry was 44.2, up 0.4 point; that in the construction industry was 35.6, up 0.5 point; that in the transportation industry was 40.5, up 0.2 point. The confidence index of SMEs in the wholesale & retail industry was 42.6, up 0.4 point; that in the accommodation & catering industry was 33.4, up 0.5 point; and that in the service industry was 34.3, up 0.6 point.

Notes:

All the indicators are positive ones with the value ranging between 0 and 100; the critical point is 50, representing the general status. An index higher than 50 indicates an improving business situation. Otherwise, the business situation gets worse.

The original data of both the risk index and the cost index have been adjusted to positive indicators. The higher the index is, the better the situation is.