1. MPI in April
In April 2024, the Building Materials Industry Prosperity Index (MPI) stood at 102.1 points. This shows weaker performance compared to the same period last year, but it is still above the critical point, generally in the prosperous range. The index fell by 26.2 points compared to March, a smaller M-o-M decrease. The April Prosperity Index indicates that the building materials industry is stabilizing and recovering, albeit weakly.
On the supply side, in April, the Building Materials Industry Price Index was below the critical point, while the Production Index was above it. The Price Index was at 99.8 points, down 0.2 points from the previous month; the Production Index stood at 102.3 points, down 26.0 points from the previous month. Overall, the prices of building materials products continue to operate at a low level; however, production activity has improved compared to last month. On the demand side, both the Investment Demand Index and International Trade Index for building materials were above the critical point, while the Industrial Consumption Index fell below it. The Investment Demand Index was at 103.0 points, down 26.7 points from the previous month, indicating a gradual start to the building market, albeit at a slower pace than the same period last year. The Industrial Consumption Index for building materials products was at 98.2 points, down 24.6 points from the previous month, showing a slowdown in demand from related manufacturing sectors. The International Trade Index stood at 107.6 points, down 26.8 points from the previous month, indicating a stable recovery in the trade of building materials goods. Overall, the demand in the building materials market is still recovering in April, but the recovery pace is slower than expected.
2. MPI Impact Factors Analysis and Early Warning
The upward momentum in the building materials market is weak. Real estate investment has not shown significant recovery, continuing to decline by 9.5% year-over-year in the first quarter, with an expanding decrease. Infrastructure investment grew by 4.5% year-over-year, which is 0.6 percentage points lower than the same period last year. Production of photovoltaic cells, high-speed train sets, and integrated circuits continues to grow, but growth in other related sectors has slowed, leading to decreased demand for building materials. In March, sales of building and decoration materials above designated size grew by 2.8% year-over-year, an increase from the previous month, indicating relative stability in the building materials consumer market, although its overall market-driving effect is weak.
Product prices are being adjusted at a low level. In April, among various sectors within the building materials industry, prices for wall materials, lightweight building materials, limestone gypsum, and architectural technical glass rose month-over-month, with three fewer industries experiencing price increases compared to March. Thermal insulation materials, limestone gypsum, and architectural technical glass maintained year-over-year growth in ex-factory prices. Most building material product prices still operate at a low level with insufficient upward price momentum, and the supply-demand relationship remains evidently skewed towards excess supply.
The foundation for recovery in the building materials industry is becoming apparent. The State Council issued the "Action Plan to Promote Large-Scale Equipment Updates and Consumer Goods Replacement" (State Issue [2024] No. 7), supporting residents in old house renovations and partial upgrades of kitchens and bathrooms, which will further stimulate demand for decorative and renovation building materials, beneficial for stabilizing market supply and demand relations. As infrastructure projects intensively start, subsequent market demand is expected to further recover. However, a significant time may be needed before the policy effects fully materialize and the downstream market gains strong momentum; climatic factors such as rainfall in key market regions will also introduce volatility in demand.
Annotations：
1. Building Materials Industry Prosperity Index （MPI）mainly monitors the operation trend of building materials industry and has a strong function of prediction and early warning. When MPI is higher than 100, it indicates that the operation of building materials industry is in the prosperity range, and when MPI is lower than 100, it indicates that in the recession range.
2. The prosperity index of building materials industry (MPI) judges the operation trend of building materials industry from the supply side and demand side. The supply side is divided into price index and production index. The demand side is divided into investment demand index, industrial consumption index and building materials international trade index according to the actual impact of the demand field on the building materials industry.
3. The price index of building materials industry reflects the change trend of ex-factory price of building materials industry. The ex-factory price does not include the expenses, product profits and taxes incurred in the circulation of building materials products. The ex-factory price is different from the market price, for the changes of the two will affect each other and there is a time lag. There may be inconsistent change trends in a certain period of time.
4. The industrial production index of building materials reflects the change trend of industrial production of building materials, excluding price changes.
5.Investment demand index, reflecting the change trend of investment market demand related to building materials.
6.The industrial consumption index reflects the changing trend of industrial consumption demand related to building materials. Industrial consumption includes not only the internal and inter industry consumption of building materials industry, but also the consumption of building materials products by downstream industries.
7.The international trade index of building materials reflects the changing trend of international trade in building materials, which is mainly composed of export indexes of building ceramics and sanitaryware, building technology glass, building stone, glass fiber and composite materials, non-metallic minerals and other industries.
