China's Logistics Prosperity Index falls for fourth month in July
THE latest figures posted by China Federation of Logistics and Purchasing (CFLP) show that China's Logistics Prosperity Index (LPI) was at 52.4 per cent in July, down 0.7 percentage points compared to June. This was the fourth month in a row that the index dropped, Xinhua reports.
But He Hui, Deputy Director of China Logistics Information Centre, said that though the July index fell, it managed to stay above the critical level of 50 per cent, and was even above 52 per cent. This means that China's logistics industry still remained steady.
Among the 12 sub-indexes, except logistics service price index, inventory turnover index, employee index and core business profit index, the rest were above 50 per cent. This indicates that the country's logistics industry is in moderate growth but the growth is weakening.
New order index was 52.3 per cent, down 2.3 percentage points compared to June. Average inventory index dropped 1.8 percentage points over the last month to 51.3 per cent. Facility utilisation index climbed 0.2 percentage points to 51.5 per cent. Capital turnover index was at 51.5 per cent, down 1.7 percentage points. Employee index was at 49.7 per cent, fall 1.3 percentage points out of the prosperity section of above 50 per cent.
What is worth noting was that logistics service price index fell 1.8 percentage points to 48.1 per cent, continuing to stay below prosperity level for three straight months. Core business cost index grew 3.6 percentage points to a high spot 61.7 per cent due to fuel price hike. While the combination of factors of falling service rate and rising fuel price resulted in a drop of eight percentage points in core business profit index to 48.1 per cent.
Mr He said, the fall of logistics service price index and rise of core business cost index indicates that China's logistics industry is still facing hardship. Judging from different areas, the index for the eastern region is undergoing a steady increase, which means that the economy in the east is in steady recovery. Judging from different sectors, high end services like express kept a dramatic increase of over 75 per cent. Railway logistics after national railway reform launched in mid June was also improving, and has climbed above the prosperity critical level.
Business activity expectation index fell 3.3 percentage points, but still remained above 55 per cent. This is a sign that the logistics industry will continue to go on an upward trend steadily.
