China: Signs of services growth amongst slowing manufacturing and real estate – NAB

By FXStreet FXStreet (Delhi) – Gerard Burg, Senior Economist at NAB, notes that in China’s ‘old economy’ – manufacturing & real estate – continue to slow, but still there are visible signs of services growth.

Key Quotes

“China’s service sector has been the main contributor to economic growth in recent times – particularly as trends in the industrial sector continue to weaken. In Q3, the secondary industries – manufacturing and construction – provided the lowest contribution to GDP since the GFC – while services (led by finance) maintained fairly stable growth.”

“The weakness in the ‘old economy’ remains evident – industrial production slowed further in October, while investment continued to trend lower (albeit recording marginally stronger growth than in September) – led by contractions in the real estate sector (where new construction activity remains weak).”

“Industrial weakness is also evident in trade data, with import values falling in October – driving the trade surplus to record levels. Falling commodity prices remain a key driver of this trend.”

“In stark contrast to the weakening in the industrial sector, China’s real retail sales edged higher to 11% yoy – a signal to the stronger performance in services. Consumer confidence also improved in the most recent reading in September. Despite …read more

Source:: FX Street