In June 2021, China's PMI index declined to 50.9%, a decrease of 0.1 percentage points from the previous month, and remained at 51% or above for four consecutive months, indicating that the economy continued to recover steadily. This month, the wood production and manufacturing industry still maintained a good momentum of development, wood production capacity continued to release, domestic demand remained stable, but the price of raw materials accelerated to rise, inventory continued to decline, and industry cost pressure increased. The GGSC-CN comprehensive index for June registered 53.3% (55.0% for last June and % 45.7% for June 2019), a decrease of 11.7 percentage points from the previous month and was above the critical value of 50% for four consecutive months, It shows that the operation of the superior forest products enterprises represented by GGSC-CN index expand from last month. See Figure 1 for more details.
Figure 1 GGSC-CN index trend from July 2020 to June 2021
Ø Hard to get stable supply of solid wood raw materials and rising prices of raw materials
Ø It is difficult to purchase wood.
Ø The raw materials for rubber manufacturing increased greatly, resulting in the increase of enterprise costs.
Ø During the rainy season and off-season of timber purchase in Guangdong Province, the quantity of timber is less than before.
Products in short supply
Black walnut, poplar logs, okan, red oak, flooring substrate
Commodity of which the price has been increased
Teak, black walnut, fiberboard, okan, taun,veneer, melamine, formaldehyde, urea, hardware
Commodity of which the price has been decreased
As for the GGSC-CN index, in June 2021, four out of five sub-indexes of GGSC-CN fall and one flat.
The production index registered 61.1%, a decrease of 8.9 percentage points from the previous month, and remained above 50% for four consecutive months. It shows that the production of superior forest products enterprises represented by GGSC CN is better than that of last month.
The new order index registered 55.5%, a decrease of 14.5 percentage points from the previous month, reflecting the ability of enterprises to obtain orders is much better than that of last month. Among them, the new export order index reflecting international trade registered 50.0%, a large increase of 20 percentage points from the previous month,, showing that orders from abroad this month is increased in June from last month.
The main raw material inventory index registered 38.9%, a decrease of 11.1 percentage points from the previous month. It shows that the raw material inventory of the superior forest products enterprises is decreased in June from last month.
The employment index registered 50.0%, an decrease of 20.0percentage points from the previous month. It shows that the employment of the superior forest products enterprises is almost same in June as last month.
The supplier delivery time index was 50.0%, same as the previous month. It indicates that the supply time of raw material suppliers of the superior forest product enterprises is almost same as last month.