In July 2021, China's PMI index declined to 50.4%, a decrease of 0.5 percentage points from the previous month. However, it remained above 50%, indicating that the economy continued to pick up and the growth rate slowed down. This month, the wood production and manufacturing industry has entered the traditional off-season and in a shrink state, the domestic demand remains stable, but the export orders have decreased significantly, the price of raw materials is still at a high level, the inventory of raw materials has continued to decline, and the cost pressure of the industry has increased.

The GGSC-CN comprehensive index for July registered 47.7% (56.9% for last July and % 44.3% for July 2019), a decrease of 5.6percentage points from the previous month, and was below the critical value of 50% first since March. It shows that the operation of the superior forest products enterprises represented by GGSC-CN  index shrink from last month. See Figure 1 for more details.

Figure 1 GGSC-CN index trend from August 2020 to July 2021 

Challenges 

Ø  The price of fiberboard increases and the supply of raw materials is tight.

Ø The supply of raw materials such as base material and ebony is tight, so it is difficult to purchase wood.

Ø Hope to reduce the procurement cost.

Products in short supply 

Ebony, Oak, Black walnut, Cumaru,  Oak above 1.8m, Fiberboard, Base material.

Commodity of which the price has been increased 

Cumaru, Pometia pinnata，Rosewood above 1.8m，Pterocarpus erinaceus Poir，Black walnut board, Yellow rose board,rubber wood, Ash wood, Plywood, Fiberboard, Reinforced base material, Solid wood blank, Base material, Urea, Melamine, Formaldehyde, Decorative paper, Epoxy acrylate 

Commodity of which the price has been decreased 

Formaldehyde, Paper

As for the GGSC-CN  index, in July 2021,three out of five sub-indexes of GGSC-CN fall and two increase.

The production index registered 46.2%, a decrease of 15.0 percentage points from the previous month, and below 50% first time since March. It shows that the production of superior forest products enterprises represented by GGSC CN is worse than that of last month.

The new order index registered 50.0%, a decrease of 5.5 percentage points from the previous month, reflecting the ability of enterprises to obtain orders is almost same as last month.Among them, the new export order index reflecting international trade registered 23.1%, a large decrease of 26.9 percentage points from the previous month,, showing that orders from abroad this month is decreased sharply in July from last month.

The main raw material inventory index registered 46.2%, an increase of 7.3 percentage points  from the previous month. It shows that the raw material inventory of the superior forest products enterprises is decreased in July from last month.

The employment index registered 53.9%, an increase of 3.9 percentage points  from the previous month. It shows that the employment of the superior forest products enterprises is  much better than that of last month. 

The supplier delivery time index was 38.5%, a decrease of 11.5 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 slowly than last month.