The Westpac MNI Chinese consumer sentiment survey is out and it shows that the fall in confidence has “accelerated” over the past month.
The index showed that consumers had “further downgraded their views on employment, the housing market and the state of their personal finances,” Westpac said in the release accompanying the survey results.
In a clear sign that the consumer sector, perhaps the broader Chinese economy, is faltering the survey showed broad-based weakness across all 5 components of the survey.
The best performing sector was respondents view of their current personal finances – but even it fell 1% on the month while “consumers’ willingness to buy large household goods hit a series low.”
This is an unequivocally poor outcome for the series and shows the challenges ahead for the Chinese economy and a growing need for the PBOC to consider broader stimulus measures if growth is not going to slip below 7% soon.
Indeed the fact that “Employment Outlook Indicator” fell for the fifth month in a row, to levels not seen since the Chinese New Year period in 2009 – when reports were that more than 20 million workers went home for the holidays and didn’t return to work – highlights just how weak the outlook might have become.
Westpac’s senior international economist Huw McKay said that with the deterioration in sentiment the economy was reliant entirely on export as the engine of growth and the time for stimulus was now.