Westpac MNI China Consumer Sentiment Indicator for September at 113.2
- vs. 113.3 in August
- Down 0.1% m/m
- Down 4.3% y/y
- September outcome is 6.9% below the long run average
Says Westpac:
- 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
- Three of the five components declined from the previous month
- Current and expected family finances both moved lower, as did ‘time to buy a major household item’
- Gains came in ‘business conditions one year ahead’ and ‘five years ahead’, with the former up by 2.2pts, although it remains 4.1% below the level of a year ago
- The conservative interpretation of the survey is that consumers do not expect the economy to weaken anew from its already underwhelming state. We have noted repeatedly that households have been considerably less impressed with the state of the economy than manufacturing firms appeared to be.
- With the maintenance of full employment an obvious threat, selective monetary and (especially) fiscal easing ought to continue, in addition to loosening controls on housing purchases and public non-residential building activity.
- Taking the implications of the survey into account, Westpac maintains its view that GDP growth will decline from 7.5%yr in Q2 to between 7.0% and 7¼% in Q3. The slowdown in domestic demand will be more dramatic than that of course, with net exports expected to contribute strongly to Q3 growth.
