1. MPI in May
In May 2024, the Building Materials Industry Prosperity Index (MPI) stood at 104.0 points, an increase of 1.9 points compared to April. This index is above the critical point, indicating it is within the favorable range. However, it is still weaker than the performance in the same period last year. The May MPI suggests that while the building materials industry is maintaining a stable recovery trend, it continues to operate under weak conditions.
On the supply side, In May, the Building Materials Industry Price Index was below the critical point, while the Production Index was above it. The Building Materials Industry Price Index stood at 99.9 points, an increase of 0.1 points from the previous month, remaining essentially stable. The Production Index was at 104.1 points, up by 1.9 points from the previous month. Overall, the prices of building materials continue to fluctuate at low levels, while the production activity has increased compared to the previous month.
On the demand side, the Building Materials Investment Demand Index, Industrial Consumption Index, and International Trade Index were all above the critical point. The Industrial Consumption Index rose above the critical point, playing a positive role in driving demand. The Building Materials Investment Demand Index was at 104.0 points, up by 1.0 points from the previous month, indicating an increase in construction market demand, although the recovery level is not as high as in the same period last year. The Industrial Consumption Index for construction materials was at 104.6 points, an increase of 6.4 points from the previous month, reflecting improved demand in related manufacturing industries that use building materials. The International Trade Index for building materials was at 101.2 points, down by 6.4 points from the previous month, indicating that the trade in building materials remains stable but its driving effect has weakened. Overall, while the demand for building materials in May is still recovering, the pace of recovery is slower than expected.
2. MPI Impact Factors Analysis and Early Warning
The overall market demand in the building materials industry continues to recover. With the initiation of national major projects and key projects in various regions, there are signs of recovery in the demand for building materials in the infrastructure sector. Investments in transportation, water conservancy, and other fields have increased by over 10%, but real estate investment has significantly declined, adding uncertainty to market demand. It is expected that the production of products such as solar cells, automobiles, EMUs (Electric Multiple Units), household appliances like air conditioners, mobile phones, and integrated circuits will maintain stable growth, supporting the demand for related building materials. International trade in building materials remains stable. These factors collectively support the recovery of demand for building materials, contributing to the slight increase in the MPI.
In May, within the building materials industry, the prices of products in six sectors—wall materials, insulation materials, limestone and gypsum, building stones, technical glass, and mineral fibers and composite materials—increased month-on-month. The number of industries with rising prices increased by three compared to April. However, the prices of most building materials continue to operate at low levels. Overall, the prices of building materials are still in a low adjustment phase, with insufficient upward momentum.
The operation of thebuilding materials industry still faces fluctuating factors. In May, the production index for most industries within the building materials sector was in the favorable range, with enterprises accelerating production compared to the previous month and maintaining growth in capacity supply. The characteristics of strong supply and weak demand are expected to continue, putting pressure on product price increases. Seasonal and other factors in the second quarter are expected to have a greater impact on construction market activities and the supply and demand of production factors such as coal and natural gas, affecting market recovery and energy costs. Additionally, differences in regional and industry market characteristics and business strategies of enterprises will become more apparent, increasing the volatility factors affecting industry operations.
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.
