China’s economic rebound showed signs of plateauing in September, weighed down by lackluster home and car sales, a weaker stock market and worsening business confidence.
Recovery Plateauing
Outlook worsened, suggesting challenges remain
Source: Bloomberg Economics
Note: Redder hues indicate the economy is heating up, bluer hues the opposite.
That’s the assessment from the earliest available indicators, which showed China’s recovery is losing pace. The aggregate index combining eight indicators tracked by Bloomberg this month slipped into contraction, compared to accelerated expansion in August. China has staged an uneven recovery, initially driven by strong industrial output yet with recent data showing signs that consumption has started to catch up. A strong and broad spurt in spending is needed for a more meaningful economic rebound.
New home sales in China’s four biggest cities slowed in the first three weeks of September, reversing August’s pickup. Small-business confidence eased marginally after rising for six straight months, while a gauge of expectations rose further into growth territory.
The pace of economic expansion moderated marginally for small businesses in September, despite continued recovery, according to Standard Chartered Plc, which surveys more than 500 smaller firms each month. The growth momentum indicator eased from a month ago and the “current performance” reading retreated for the first time since March.
Purchasing manager indexes due Wednesday are expected to show September manufacturing improved slightly while non-manufacturing moderated from August’s level.