China’s Manufacturers Feel the Squeeze

China’s Manufacturers Feel the Squeeze

It’s been a trying year for China’s manufacturers. Like many other businesses, they aren’t sure whether they should worry more about the U.S.-led global economic slowdown, or the surge in world commodity prices and domestic inflation. Two surveys suggest they’re weathering the slowdown in demand fairly well so far, but are getting punished by higher costs for raw materials.

The input costs index of the two purchasing managers’ index surveys – one published by the brokerage CLSA and the other by the China Federation of Logistics & Purchasing — hit 75.2 in April, on a scale where 50 indicates no change from the previous month. The CLSA survey also includes an index of output prices, which stood at 62.4.

The takeaway: Companies are raising the prices they charge, but their costs are rising even faster. That means narrower profit margins.

It’s looking like a trend. Government data for the first two months of the year showed profits at industrial companies grew only 16.5%, sharply down from last year’s 37% pace. The figure got a lot of attention (see previous coverage here and here), but numerous special factors - especially bad winter weather - raised the possibility that it could have been a statistical blip.

Those pricing trends are also contributing to the shrinking of China’s trade surplus in the first quarter of this year, as Goldman Sachs economist Hong Liang points out in a new report Friday. China imports mostly raw materials and exports mostly manufactured goods. The fact that the prices of the former are rising much faster than the latter is one reason why growth in imports, now around 30%, is now outpacing the expansion of exports, which is closer to 20%.

For worried investors, it’s worth noting that hard-hit manufacturers don’t dominate China’s stock markets, and finance and service-sector companies still seem to be doing pretty well. The 1,574 companies listed on the Shanghai and Shenzhen exchanges reported an average 49.7% growth in net profit in the first quarter of 2008, with earnings per share up 39.7%, according to estimates by the Shanghai Securities News this week.

中国制造商渐感艰辛

像许多其他行业一样，对于中国制造商而言，这是艰难的一年，他们不知道他们是否应该更多担心关于以美国为首的全球经济放缓，或世界范围的物价激增、国内的通货膨胀。有两个调查表明，至今为止他们一直担心将滑落的国内需求表现尚好，但较高的原料成本却使其不断遭受损失。

这里有两个采购经理投入成本指数调查——一个由里昂证券经纪发表，另一个由中国物流与采购协会发表——4月时达到75 .24点，而这个指数在50点时就表明它在过去的一个月没有任何变化。里昂证券经纪的调查也包括了一项产出价格指数，这项指数停留在 62.4 点。
    结果是：公司虽在不断提高产品价格，但其成本上升的更快，这便意味着更小的利润率。

这看起来是一个趋势。今年头两个月的政府数据显示，工业企业的利润仅增长16.5 ％，较去年的37 ％的增长率锐减。这个数字引起了很多关注（见以前相关报道），但许多特殊因素——尤其是恶劣的冬季天气，增加了一种可能性，即这可能已经是数据中的亮点了。

正如高盛公司的经济学家梁红在周五的一份新报告中指出的，这种价格趋势也有助于缩小今年第一季度中国的贸易顺差。中国进口的大部分是原材料而出口的大多是制造品，事实上，前者价格上升的速度远远超过后者是进口增长的原因之一，现在30 ％的进口增长正在不断超出近20 ％的出口增长。

对于担忧的投资者，这里值得注意的是——受冲击的制造商不会左右中国的股市，金融和服务业的公司现在表现相当不错。上海和深圳证券交易所的1574家上市公司报告显示，2008年第一季度的净利润平均实现49.7 ％的增长，据本星期上海证券报估计，平均每股盈余高达39.7 ％。