Construction, Operating System And Applied Value Of China Timber Purchasing Managers’ Index (PMI)

Purchasing Managers’ Index (hereinafter referred to as PMI) is an indicator to monitor the cyclical fluctuations of the economy. It has been considered as the barometers of the economy due to its advantages such as being the forerunner and scientific based result. It also has a reputation as the indices on barren island. However, the overall PMI can only indicate wether the economy is expanding or contracting. It cannot reflect the condition of specific industry. PMI index of specific industry is the barometer to indicate the conditions of the industry. The Institute for Supply Management conducted investigation of the PMI index in 1929. Since then, industry based PMI index has been developed, such as PMI index for Detroit’s auto, PMI index for China steel and PMI index for chemical fiber. The National Bureau of Statistics of China constructed the PMI index for national manufacturing sector in 2005. It has published industrial PMI, but suspended publishing since 2013. So far. the timber manufacturing sector in China has not yet have any quantified index to reflect the expanding or contracting trend.Taking the example of timber sector PMI, this paper focuses on in-depth research on specific industry based PMI. The study includes questionnaire design of industry based PMI index system, sample selection, synthesis of indices and weighting, as well as guarantee and incentive mechanism for sustainable publishing PMI index. It is the first time to conduct systematic research on industry based PMI index. By combining empirical research and case analysis, key findings of this paper include:1) In order to maintain comparability with the international general PMI data, the questionnaire of timber sector PMI shall be consistent with the questionnaire of general PMI. Other key information of the industry, such as "electricity","technical input" and "sales" can be supplement.2) The samples for timber sector PMI were selected by using PPS sampling. The quantity of selected samples is 384, covering six sectors including paper, furniture, plywood, wood flooring, architecture wood products (wood doors and windows, wood stairs) and bamboo products with consideration of industry, regional distribution and company size. Dynamical adjustment for the samples has been regularly carried out after completion of preliminary sampling.3) The result of principal component analysis shows that the weighting of existing timber sector PMI has its improving space. Giving the weight of 20%,25%,20%, 15% and 20% respectively to production, order, purchasing, stock of raw material and employment to construct the timber sector PMI could better reflect the situation of forestry economy.4) The timber sector PMI can reflect the seasonal pattern of timber sector. It can be used to monitor the counter-cycle market and as pre-warning indicator, which cannot be achieved by the national overall PMI.5) The subjective questions from the timber sector PMI questionnaire could prove the authenticity of the objective questions. For example, the quantity and price trend of raw material could prove whether the purchasing price of raw material index is correct or not.6) The triple helix theory based PMI publication system extends the function of policy making, production and research, to guarantee the authenticity and sustainability of timber sector PMI and other investigated data.The research method of timber sector PMI in this paper provides basic ideas and practical experience for study of PMI for other industries. The construction process of PMI index system for different industries is pretty much the same. But the questionnaire design, sampling method or synthesis of index could be significantly different. The index system shall be a living system. Continuous tracking and dynamical adjustment shall be carried out to the index system in order to better reflect the current situation of the industry. The traditional single line based data publishing model shall be abandoned. The open style public data communication system which can change roles among policy making, production and research shall be the future development trend.