China Growth Tracker: Worsening Data Outturns Likely to Continue

We published a note on how to track Chinese growth in real time using financial and commodity market prices. In these weekly reports, we update the indicators to help us track growth.

Summary

• Our high-frequency China reopening index has continued to worsen following the weaker May PMI outturn.
• Our market and economic data-based China growth trackers have followed suit with all updated components weakening since last week’s update.

PMI Downgrades to Continue

May PMIs worsened in line with our forecast. Our reopening index has continued to worsen, indicating the worst may still not be over (Chart 1). Weaker outturns at the box office come alongside a weakening trend for travel and a bottoming economic index (Chart 2).

Our market-based and economic data-based worsened in line with our reopening index (Charts 3 and 4). The former saw all five components’ yearly growth decline while new orders and backlogs proved a negative for the latter (Table 1 and Table 2).

Bilal Hafeez is the CEO and Editor of Macro Hive. He spent over twenty years doing research at big banks – JPMorgan, Deutsche Bank, and Nomura, where he had various “Global Head” roles and did FX, rates and cross-markets research.

Ben Ford is Researcher at Macro Hive. Ben studied BSc Financial Mathematics at Cardiff University and MSc Finance at Cass Business School, his dissertations were on the tails of GARCH volatility models, and foreign exchange investment strategies during crises, respectively.

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