Insufficient release of market demand, manufacturing PMI fell back to 49% in July, how to break the internal situation of the industry?

PMI is a comprehensive index weighted by five diffusion indexes: product order (abbreviated as order), production volume (abbreviated as production), production management personnel (abbreviated as employees), supplier delivery date (abbreviated as delivery) and main raw material inventory (abbreviated as inventory). These five indicators depend on their primary impact on the economy, and the weight of each indicator is: order 30%, production 25%, employee 20%, distribution 15%, inventory10%; In July, the manufacturing PMI fell back to 49%, so we should pay attention to orders and production.

The introduction of relevant policies can effectively promote the expansion of market demand. We can stimulate public consumption by issuing coupons and reducing bank interest, thus increasing the market demand for products. Under the current economic system in China, the market plays an increasingly decisive role in the production process. The reason for the decline in manufacturing PMI this time is that the supply of products exceeds demand, leading to a decline in the index. Therefore, relevant departments should adopt corresponding fiscal and monetary policies to stimulate residents' consumption and help the healthy development of manufacturing industry.

Make full use of market information to release production capacity reasonably. The quantity of goods produced by producers is not determined by the quantity of raw materials in hand, but more importantly by market demand. When the market supply is equal to the market demand, the industry can maximize profits, and once it exceeds or fails to reach the equilibrium point, it will harm the interests of producers or consumers. At the moment when the PMI index of manufacturing industry is falling, the most important thing is to investigate and study the relevant information of market demand, and make reasonable production on this basis to avoid the occurrence of unfavorable phenomena such as inflation.

Market-determined production currently occupies a large proportion in China's national economy, so both producers and consumers should fully understand market-related information before making any decision. Only in this way can we achieve a win-win situation for both sides, otherwise both sides will lose, and the feedback to the entire national economy is also a downward state, similar to the decline of the manufacturing PMI index.