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China Logistics Prosperity Index (July 2017)

The business volume index of China Logistics Prosperity Index (LPI) came in at 55.8 in June, down from 57.7 in May. 1 Except the logistics service charges index, all sub-indices were in the expansionary zone in June.

1.       Growth in logistics activities decelerates

The business volume index came in at 55.8 in June, falling for the second consecutive month. The downtrend of the index indicates a deceleration in the growth in logistics activities. This was in line with a weaker growth in new orders in June. The new orders index dropped from 57.4 in May to 54.9 in June.

The employment index rose from 52.5 in May to 52.9 in June, indicating that the employment in the logistics industry has increased at a faster pace lately. In the meantime, the capacity utilization index came in at 53.1 in June, staying above 50. Logistics enterprises have continued to see enhanced utilization of their facilities.

2.       Inventories in warehouses increase

The inventory turnover index came in at 52.5 in June, above the critical 50-mark, pointing to faster inventory turnover. Meanwhile, the average inventory index was 53.2 in June. The index was above 50, showing that inventories in warehouses increased in the month.

3.       Faster turnover of cash

The cash flow index stayed above 50, registering 52.9 in June. The latest reading indicates faster turnover of cash for the logistics enterprises surveyed.

4.       Cost pressure on logistics enterprises remains intense

The operating cost index went down slightly from 57.4 in May to 57.0 in June. The index was still well above 50 in June, showing that cost pressure on logistics enterprises remained intense in the month. Meanwhile, logistics enterprises were unable to pass through the higher costs to their customers. The logistics service charges index came in at 49.8 in June, staying below 50 in four of the past five months. Against this backdrop, the operating profit index fell from 52.3 in May to 51.9 in June, indicating a slower growth in profits made by logistics enterprises.

5.       Growth in fixed asset investment reaccelerates

The fixed asset investment index rebounded from 53.4 in May to 54.2 in June, indicating that the month-on-month growth in fixed asset investment by logistics enterprises has reaccelerated. Meanwhile, the business expectations index stayed high at 57.0 in June, showing that enterprises in the logistics industry continued to be optimistic about the business outlook for the next three months.

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Content provided by Fung Business Intelligence
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