Headline macro-economic data for August fell sharply, but a closer reading of the numbers suggests that worse may be to come, with the full impact of weak credit growth on the real estate sector yet to be felt.
Latest report
11 Sep 2014
Home / Capital Intensive / Autos
Headline macro-economic data for August fell sharply, but a closer reading of the numbers suggests that worse may be to come, with the full impact of weak credit growth on the real estate sector yet to be felt.
The evidence suggests that much of the weakness seen in July continued throughout August. Though there are some signs of life in the real estate sector, we continue to believe that, without substantial government action, a significant uptick in growth remains unlikely.
Investors and economists are debating whether recent strong growth on mainland stock markets represents the return of a bull market, or simply a long-awaited readjustment.
Labour demand strengthened on both a MoM and YoY basis in August, driven by a sharp rise in manufacturing demand. Overtime and blue-collar wage growth accelerated, according to our latest survey of 285 construction, manufacturing and service-sector companies, while companies were able to fill a larger proportion of vacancies.
Export growth accelerated on both a MoM and YoY basis in August driven by stronger shipments to the US, according to our latest survey of 200 export manufacturers, export trading companies and shipping agents nationwide. However, new order growth moderated for the second successive month, while the outlook for the coming month eased.
China Confidential’s proprietary indicators showed further weak freight activity in August, offsetting signs of improvement across other key areas of the economy. Exports, consumer spending, household income and labour demand growth all strengthened, according to our latest surveys. Real estate developers reported an increase in new home sales volumes for the first time in four months, while prices stabilised after several months of falls.
Despite the fall in home sales this year, our analysis suggests that China’s housing market is undersupplied rather than oversupplied.
Sluggish July data and initial indications from our proprietary surveys in August appear to have borne out our prediction that the apparent uptick in Chinese economic growth seen in June would prove short-lived.
Labour demand moderated slightly on a MoM basis, but strengthened YoY in July, primarily due to strong demand from construction firms. Our latest survey of 285 companies nationwide also showed an acceleration in blue-collar wage growth, while employers were able to fill a larger proportion of job vacancies.
Chinese export growth slowed on both a MoM and YoY basis in July following several strong months of growth, according to China Confidential’s latest survey of 203 export manufacturers, trading companies and shipping agents across the country. Our key indices nevertheless remained in positive territory, while the outlook for the coming month improved.
We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on this website. However, if you would like to, you can change your cookie settings at any time. Find out more about our cookie policy.