China September Sales Indexes Reflect the Return of Price Inflation, and the Possible Return of Chinese Economic Growth

The First Data on Economic Activity Levels in China - Every Month
The only survey with current month, month-on-month, monthly year-on-year, and forward looking questions
Updated: September 20, 2023

The Sales Managers September survey suggests a significant pick-up in economic activity from the gloomy summer index results. The all sector Sales Growth Index in particular shows an increase to healthy 53.1 reading. Covid related supply problems still haven't gone away completely, but the percentage of companies reporting they are still affected in one way or another is way down ( at just over a third ) from the 55% recorded early in 2023.

The Manufacturing survey results continue to suggest that the sector is at best flat-lining. The Sales Managers Manufacturing Index remains below the 50 "no growth" line, although showing an improvement over August.

Source: World Economics
Note: Data Shown as a Diffusion Index. (50 = 'No Change', above 50 = Increasing growth, below 50 = Declining growth)

The Services sector results, in contrast, are significantly more positive, with the overall Services Sector Index up again in the month, now standing at a very positive 54.0, a 5-month high.

Perhaps most important of the September results are the Price Index numbers.The Manufacturing Sales Managers Price Index still registered numbers below 50, although in September the Index rose to an 8 moth high at 49, indicating modest price falls over the month. But in the Services sector, a very different story is emerging, with the Services Price Index registering 53.2, a 22 month high. The All Sectors Price Index recorded a figure of 50.9, a 14 month high. This suggests fears of Chinese price deflation ushering in a Japanese style period of very low or negative growth have been overblown.

Given the shrinking prospects for global growth in a world grown more suspicious of international trade, and increasingly fettered by sanctions of one kind or another, predictions of GDP growth are of diminishing value.

But the signs of a resumption of growth in the worlds unquestioned no 1 Growth Engine over recent decades , are looking a little more positive.

Sales Managers Index Components: All-Sectors

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About the Sales Managers Indexes

The Sales Managers' Indexes provide the earliest monthly data on the speed and direction of economic activity in key growth areas of the world.

The SMI’s (Sales Managers’ Indexes) are compiled and analysed by World Economics and are based on survey data collected from a panel of companies stratifying all Industry Classification Board (ICB) sectors which are weighted to reflect their contribution to national Gross Domestic Product.

Key advantages of the SMI's:

• The SMI's provide the first indication each month of the speed and direction of economic growth.
• The SMI's provide the most complete indication of growth, covering all private sector activity.
• The SMI's are based on a key occupational group - sales executives - uniquely able to sense accurate changes in business activity levels.
• The SMI survey base - salespeople - are used by virtually all businesses, including in frontier markets, unlike other occupational groups.
• The SMI's focus on the key countries contributing to over 60% of China growth in recent years.