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China's warehousing index was 54.3% in August(China Freight forwarder)

Sep 05 2019

The China warehousing index for August 2019, jointly surveyed by the China federation of logistics and purchasing and China storage development co., was 54.3 percent, up 4.5 percentage points from the previous month. In each sub-index, except for the main business cost index, business activity expectations index has dropped compared with last month, the rest of the index has recovered to varying degrees.

The end-august 2019 inventory index of 21 commodity categories was 54.6%, up 4.2 percentage points from the previous month, with inventory levels rising again. In terms of different types of production materials, stocks of steel, building materials and other commodities rose considerably last month, while stocks of nonferrous metals, chemicals, petroleum, machinery and equipment fell last month. Among the consumer goods, the inventory of pharmaceutical products rebounded last month, while the inventory of food, textiles, agricultural and sideline products and daily necessities dropped significantly.(China Freight forwarder)

According to wang yong, assistant President of China storage development co., LTD., the warehousing index rebounded significantly in August, ending three consecutive months of decline and returning to an expansion range of more than 50% and reaching a four-month high. From the index changes, warehousing business activity is more active than the previous period, the industry has significantly eased the downward pressure. On the one hand, due to the increasing downward pressure on the macro economy and the impact of the typhoon in August, the market demand was insufficient, the site construction and transportation were blocked, the inventory level rose, and the demand for warehousing business was boosted. On the other hand, the market is expected to usher in the peak season, enterprises actively prepare goods, warehousing industry orders significantly increased. In addition, corporate profits have improved significantly, the labor supply is relatively tight, the new orders index and business activity expectations index are running high, indicating that the industry demand in the short term is relatively optimistic.

Business demand is growing fast. The volume index rose 8.1 percentage points from the previous month to a five-month high of 58.8 per cent in August, reflecting faster growth in demand for warehouses. According to the varieties, the steel, building materials and chemical products in the production materials category saw an obvious rebound in the volume of business. In the category of means of living, the food, clothing and household appliances and other varieties of business volume recovery is more obvious.

Improved turnover efficiency. In August, the average inventory turnover index was 51.7 percent, up 5.4 percentage points from the previous month, and returned to above the boom-contraction line after three consecutive months of decline before the end of the period, reflecting the accelerated efficiency of cargo turnover in the context of faster growth in business demand. From the point of view of the varieties, the turnover efficiency of steel, chemical industry, food, clothing, household appliances and other commodities has recovered significantly.

The price index continued to recover. In August, the charged price index was 52.4%, up 1.0 percentage points from the previous month and remaining in the expansion range for 12 consecutive months, reflecting that the charged price in the warehousing industry still keeps the upward trend and the increase is larger than the previous month.

The enterprise benefit recovers obviously. In August, the main business cost index was 54.4%, down 2.7 percentage points from the previous month. The business profit index was 52.4%, 3.8 percentage points higher than the previous month, which reflected that under the background of supported business demand, fee prices rose, the growth rate of business costs declined, and the profit situation improved significantly compared with the previous period.

Labor supply has eased somewhat. In August, the business employee index was 52.4 percent, a 3.1 percentage point rise from the previous month, and back above the boom-contraction line, reflecting a significant increase in the number of workers in the warehouse sector this month.

From late trends, new orders index was 58.0%, up 5.6% last month, a business activity index are expected to be 58.4%, fell 2.5% last month, two index remained high, show that demand has begun to gradually release, in anticipation of the busy season, business confidence recovery is relatively obvious, the expected future demand in the short term storage industry is more optimistic.

China warehousing index survey notes

1. Explanation of main indicators

China warehousing index system is a set of index system based on warehousing enterprises, which reflects the operation of the warehousing industry and the supply and demand situation and changing trend of major commodities in the domestic market with detailed and dynamic data through quick investigation.

China warehousing index is composed of 4 weighted indexes including ending inventory, new orders, average inventory cycle times and employees.

2. Survey coverage

China's inventory index system includes two categories: production materials and consumer goods. The survey will cover major provinces, cities and regions across the country (except Hong Kong, Macao, Taiwan, xinjiang and Tibet). The surveyed enterprises are mainly logistics enterprises providing third-party warehousing and supporting services for the society. Mainly refers to the comprehensive warehouse and professional warehouse. It does not include the self-run warehouse of the production enterprise and the self-use warehouse of the user.

3. Calculation method

China warehousing index is composed of 1 comprehensive index and 11 individual indexes. The diffusion index method is used for single index. The composite index adopts the weighted composite index method.

Calculation formula of single index:

That's the percentage of positive answers plus half of the percentage of unchanged answers.

DI= percentage of increase option ×1+ percentage of flat option ×0.5

Formula for calculating the composite index:

China warehousing index = ending stock ×30%+ new orders ×25%+ employees ×25%+ average stock turnover times ×20%

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