Chinese growth seems to be slowing even though the preliminary HSBC manufacturing PMI for September was released yesterday at 50.5 – better than the 50 expected by the market.
This morning’s release of the Westpac MNI China Consumer Sentiment Index appears to reinforce this notion of a slowdown. The index at 113.2 was down 0.1% for September but it’s down 4.3% over the year and 6.9% below the long run average.
Huw McKay, senior international economist at Westpac, said in a note that the survey, “indicates that the anxieties gnawing away at the Chinese consumer through most of this year remain very much in evidence as Q3 draws to a close.”
The survey highlighted that like consumers everywhere, Chinese respondents seem concerned about the outlook for their future with, “current and expected family finances both moved lower, as did ‘time to buy a major household item’.”
Survey respondents attitude to housing continued to fall in line with the market and even though expectations of business conditions 1 and 5 years out perked up, the bad news for the economy is that the employment indicator has continued to fall over the past 3 months to levels that require – or are at least consistent with – policy easing.
It all points to a slowing economy and McKay says that, “taking the implications of the survey into account, Westpac maintains its view that GDP growth will decline from 7.5% per year in Q2 to between 7.0% and 7¼% in Q3. The slowdown in domestic demand will be more dramatic than that of course.”