Released: 23 January 2019

China Manufacturing Growth Story Grinds to a Halt in January

  • Sales Managers Business Confidence at 35 month low and deteriorating fast
  • Sales Growth Index at 6 year low and falling sharply
  • The Sales Managers Jobs Index at lowest on record and contracting
  • The Profits Index has fallen steadily for over a year and is also now in contraction territory

January was the cruellest month (to date) for the once all conquering Chinese Manufacturing sector. Manufacturing Confidence, Sales, Jobs and Profits were in January all at or near all-time record Index lows. Only Prices continue to rise rapidly, and this is not a good sign.

It now seems very likely that the official 6.4% growth rate indicated by China's latest GDP numbers does not reflect reality. Papers in World Economics have long suggested that the Chinese GDP data are artificially supported by unreliable measures of inflation (see Data Manipulation of Inflation Statistics Artificially Raises Real GDP, Christopher Balding, World Economics Journal, June 2014). A recent note in the Financial Times confirmed that some analysts also suspect this to be the case. Recent decisions to halt publication of several important economic data series that might shed light on current growth patterns has sparked further suspicion that officials are averse to too much illumination of economic trends right now.

Storm Clouds are very likely gathering for global brands as the Chinese economy, for so long the growth engine of close to 30% of world economic growth, stutters slowly (slower indeed than it than it has for 20 years), towards the Year of the Pig.


China: Headline Sales Managers’ Index (SMI) for Manufacturing

 The Headline Sales Managers' Index (SMI) - a composite indicator designed to provide the most up-to-date assessment of business activity.




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INDEXES AVAILABLE:
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