Research Group of Small and Micro-sized Enterprise Operating Index

I. SMEOI increased upward to above the threshold

In July 2023, the Economic Daily – PSBC Small and Micro-sized Enterprise Operating Index (Fig. 1, hereinafter referred to as “SMEOI”) reported 50.2, up 0.6 points over the previous month. It stayed within the contraction range for three months after dropping below the threshold in April 2023 and climbed upward above the threshold in this month.

Fig. 1 Economic Daily – PSBC SMEOI

II. All the eight subindices increased, with the confidence index rising the most

All the eight subindices increased (Fig. 2). Specifically, the market index was 51, up 0.6 points; the purchasing index stood at 50.1, up 0.5 points; the performance index registered 50.1, up 0.4 points; the expansion index read 49.1, up 0.7 points; the confidence index posted 53.3, up 1.1 points; the financing index recorded 49.2, up 0.7 points; the risk index closed at 49.3, up 0.7 points; and the cost index was 47.4, up 0.7 points.

Among the eight subindices, the market index, purchasing index, performance index, and confidence index run above the threshold, indicating that the micro and small enterprise market was performing well, purchasing ability improved, performance enhanced, and confidence was strengthened. The other four subindices were below the threshold but higher than the previous month, indicating improvement in previous weakening expansion and financing, and rising risks and costs of micro and small enterprises. As for indicators under the subindices, it is mainly manifested in an increase of 0.4 points, 0.8 points, 0.7 points, 0.4 points, 1.2 points, and 0.9 points in raw material purchasing, raw material inventory, gross profit, profit, entrepreneurs’ confidence and confidence in the industry, respectively.

Fig. 2 Subindices of Economic Daily – PSBC SMEOI

In terms of the trend over the past 12 months, the confidence index stayed above the threshold more frequently, which reflected the rising confidence of micro and small enterprises; the purchasing index and market index ran above the 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. The performance index, expansion index, financing index, risk index, and cost index ran below the boom threshold, reflecting the unsatisfactory performance of enterprises, long-term sluggish expansion, unsatisfactory financing environment as a whole, and rising operating risk and business costs.

III. All the six regional indices increased, with Southwest China rising the most

All the six regional indices increased (Fig. 3). Specifically, the North China index reported 50.8, up 0.8 points; the Northeast China index registered 48.9, up 0.3 points; the East China index read 50.4, up 0.7 points; the Central & South China index posted 50.1, up 0.6 points; Southwest China increased by 1 point to 50.5; and the Northwest China index rose by 0.5 points to 50.8.

Fig. 3 Regional Development Index

The North China, Central & South China, and Southwest China indices rose from below the boom threshold to above the threshold. Specifically, the North China index rose because of the strong market demand, Central & South China climbed due to significantly enhanced confidence, and Southwest China increased due to rapidly improved confidence. In July 2023, only the East China index stayed in the contraction range, mainly due to weak market and performance growth.

IV. Six out of the seven industry indices increased, and the transportation industry remained unchanged from last month

Six out of the seven industry indices increased while the remaining one remained unchanged from the previous month (Fig. 4). Specifically, the index of the agriculture, forestry, animal husbandry & fishery industries reported 50.1, up 0.8 points; that of the manufacturing industry posted 50.1, up 0.6 points; that of the construction industry stood at 49.8, up 0.3 points; that of the transportation industry registered 49.3, on par with last month; that of the wholesale & retail industry went up by 0.6 points to 50.3; that of the accommodation & catering industry increased by 1.5 points to 51.4 and that of the service industry reported 50.7, up 0.9 points.

Fig. 4 Comparison of Industry Indices

The agriculture, forestry, animal husbandry & fishery industries, manufacturing industry, wholesale & retail industry, accommodation & catering industry, and service industry increased from below the threshold to above the boom threshold. The agriculture, forestry, animal husbandry & fishery industries and service industries increased mainly due to the narrowing of the rising trend of costs. The manufacturing industry and wholesale & retail industries increased mainly due to the accelerated rise of confidence. The accommodation & catering industry climbed mainly due to the significant easing of the decline in performance. The construction industry climbed within the contraction range, which was manifested by improved performance, narrowing of the rising trend of costs, and unsatisfactory purchasing and performance. The transportation industry stayed below the threshold as the previous month, which was mainly reflected in the narrowing of the upward trend of the market.

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.