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China Logistics Prosperity Index (September 2017)

The business volume index of China Logistics Prosperity Index (LPI) came in at 53.5 in August, down from 53.8 in July.1 Except the logistics service charges index, all sub-indices were in the expansionary zone in August.

1.       Demand for logistics services improves

The business volume index dropped by 0.3 pts from the previous month to 53.5 in August, indicating a deceleration in the growth in logistics activities. Meanwhile, the new orders index rebounded from 52.9 in July to 53.5 in August, showing that the demand for logistics services has improved with the approach of the peak season for the construction industry. The employment index went up from 49.8 in July to 50.9 in August, returning to the expansionary zone. The August reading indicates a rise in the employment in the logistics sector. In the meantime, the capacity utilization index came in at 54.8 in August, staying above the critical 50-mark. Logistics enterprises have continued to see enhanced utilization of their facilities.

2.       Smaller increase in inventories in warehouses

The inventory turnover index was 52.1 in August, above the critical 50-mark, pointing to faster inventory turnover. Meanwhile, the average inventory index fell by 1.4 pts from the previous month to 50.4 in August, showing a smaller increase in inventories in warehouses in the month.

3.       Faster turnover of cash

The cash flow index stayed above 50, registering 53.5 in August. The latest reading indicates faster turnover of cash for the logistics enterprises surveyed.

4.       Costs on logistics enterprises increase at a slower pace

The operating cost index fell to 55.9 in August from 57.0 in July, showing that costs on logistics enterprises have increased at a slower pace lately. Meanwhile, the logistics service charges index rose from 48.5 in July to 49.8 in August, below 50, indicating a slighter drop in logistics service charges in August. The operating profit index went up from 48.3 in July to 52.2 in August, returning to the expansionary zone. The latest reading indicated that the month-on-month growth in logistics enterprises’ profits turned positive in August.

5.       Growth in fixed asset investment by logistics enterprises decelerates

The fixed asset investment index dropped from 53.7 in July to 50.9 in August, indicating a deceleration in the month-on-month growth in fixed asset investment by logistics enterprises. Meanwhile, the business expectations index stayed high at 58.7 in August, 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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