Chinese consumer sentiment stabilised in November, but remained close to the three year low seen in October, with growing pessimism about business conditions offset by a marginal improvement in consumers’ views about household finances.
The Westpac MNI China Consumer Sentiment Indicator was broadly unchanged at 111.0 in November compared with 110.9 in October. Following three consecutive falls, consumer confidence stabilised barely above the record low level of 110.8 seen in September 2011 and down 8.8% since the start of the year.
Four of the five components which make up the Westpac MNI China CSI improved between October and November. They have, though, all weakened over the past year and are below their respective series’ averages. Current Personal Finances in particular is down by nearly 15% on the year.
Business Conditions in One Year was the only component of the Westpac MNI China CSI that decreased, hitting a new series’ low in November. Consumers’ views on business conditions compared with a year ago also worsened, with the Current Business Conditions Indicator falling to the lowest since April 2009.
Sentiment on the job market improved for the first time in six months, with the Employment Outlook Indicator recovering to a four month high in November. This chimed with a significant decline in the number of respondents citing future loss of income or employment as their main reason for saving.
There were also signs of a stabilisation in the housing market. House Buying Sentiment improved for the first time in seven months and House Price Expectations increased for the first time since July. Notably, official data on housing sector activity in the month of October also implied that market conditions have improved, albeit from distressed levels.
Commenting on the data, Chief Economist of MNI Indicators Philip Uglow said, “November represented a welcome stabilisation in consumer sentiment following three consecutive monthly declines. Still, confidence remains at a historically low level and it is far too early to conclude that the trend decline has run its course.”
Westpac’s Senior International Economist Huw McKay commented that “The tentative signs of consolidation evident in this survey are consistent with our view that domestic demand bottomed out in the September quarter. These results argue that the balance of risks regarding the 2015 growth outlook are more balanced than the pessimistic rhetoric of the analyst community would suggest. The slightly more optimistic appraisal of the housing market is an extremely welcome development, as it indicates that the policy support package announced on September 30 is beginning to gain some traction following a lukewarm initial reception in the October survey.”
FTSE Mondo Visione Exchanges Index:
Westpac MNI China Consumer Sentiment Indicator Steady At Low Level In November - Sentiment On Job Market Rises, Real Estate Attitudes Firmer
Date 26/11/2014