We mentioned this first last night, that data for January showed a shock 7.5% year-over-year fall in Chinese electricity consumption — the first such fall on record excluding the crisis.
Here’s a chart from Nomura’s Zhiwei Zhang and Wendy Chang comparing electricity production to industrial production. They call it an “alarming fall.”
The report downplays efforts to equate this drop to the Chinese New Year. While drops have been seen, such an outright fall is pretty surprising.
Official data generally reports electricity production monthly, which is usually well-
matched by consumption, but data for January and February is combined to help smooth the
seasonal effect of the Chinese new year (CNY). With today’s report of lower January
consumption, we expect a concomitant decline in electricity production.
In the last 10 years CNY has often fallen in different months in consecutive years, which
leads to swings (trough to peak in Figure 1) in the year-on-year data (see Note). However, we
have not (ex-2009) seen an actual decline in electricity production since 2002. We therefore
believe that this drop reflects a sharp slowdown in industrial production.
Speaking of China, here’s a great chart from Reuters’ Scotty Barber on Germany, and its exports to both America and China.
Photo: Scotty Barber, Reuters
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