In January 2022, China's PMI index registered 50.1%, a decrease of 0.2 percentage points from the previous month, operating in the expansion range (above 50%) for 3 consecutive months, indicating that the macro economy continues to recover in an all-round way, but the triple pressure of shrinking demand, supply shock and weakening expectation still exists. This month, the development of wood production and manufacturing industry remained stable; New orders on the demand side increased, but foreign demand was relatively sluggish. The output on the supply side remained stable, and the prices of main raw materials fell for three consecutive months.The GGSC-CN comprehensive index for January registered 50.2% (42.9% for last January  and 48.4% for January 2020), an increase of 2.7 percentage points from the previous month, and was above the critical value of 50%. 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 February 2021 to Janurary 2022 

Challenges 

Ø  Pinus sylvestris log was restricted by Russia's export and was forced to change other tree species.

Ø The price of chemical raw materials has increased greatly, resulting in a significant increase in costs.

Ø It is difficult to purchase base materials.

Ø Wood resources are scarce and the supply problem is serious.

Products in short supply 

Merbau，Teak, Base material, Cumaru，Oak

Commodity of which the price has been increased 

Teak, Cumaru，Oak，panel，solid wood, leather, sponge, paint, paperboard, glue, miscellaneous firewood, base material, paraffin.

Commodity of which the price has been decreased 

Taun，fiberboard, cloth, glass, melamine, urea, formaldehyde

As for the GGSC-CN  index, in Janurary 2022, two sub-indexes of GGSC-CN  increase , three decrease.

The production index registered 50.0%, an increase of 12.5 percentage points from the previous month, and above 50% after three months. It shows that the production of superior forest products enterprises represented by GGSC CN is almost same with that of last month.

The new order index registered 53.6%, a decrease of 2.7 percentage points from the previous month, reflecting the ability of enterprises to obtain orders is better than last month.Among them, the new export order index reflecting international trade registered 35.7%, an increase of 4.5 percentage points from the previous month,, showing that orders from abroad this month is decreased from last month.

The main raw material inventory index registered 39.3%, a decrease of 4.5 percentage points  from the previous month. It shows that the raw material inventory of the superior forest products enterprises is less than that of last month.

The employment index registered 42.9%, a decrease of 13.4 percentage points  from the previous month. It shows that the employment of the superior forest products enterprises is less than that of last month. 

The supplier delivery time index was 60.7%, an increase of 23.2 percentage points from the previous month. It indicates that the supply time of raw material suppliers of the superior forest product enterprises is much more quickly than last month.