China economy improved further in September, satellite data shows
CHINA’S economy showed signs of a stronger recovery in September, according to a firm analysing the global economy using satellite data.
Activity around Chinese shopping malls remained at relatively high levels in September following an increase in August, according to SpaceKnow, a US company that analyses satellite images. A pickup in cement manufacturing, which began in June, was also sustained through this month, the data show.
“We are in the ‘early signs of recovery’ team,” said Jan Pintera, an economist at SpaceKnow. He said satellite imagery showed a “positive direction for the Chinese construction sector” and “renewed consumer confidence”.
The company also compiles a new orders prediction benchmark, which combines several satellite image-derived activity indicators to create a forecast of orders in China’s official manufacturing purchasing managers index (PMI). The gauge rose to 51 in mid-September, up three points from the level a month before, according to SpaceKnow.
However, SpaceKnow’s most recent data on cement production show activity low compared to 2021, Pintera added, suggesting the years-long property slump remains a drag on construction. Activity around malls also saw a daily peak at the end of August and has weakened slightly since.
Questions remain about whether a pickup in growth recorded in official data for August can be sustained, given the ongoing weakness in the property sector.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Morning Consult’s index of Chinese consumer sentiment preserved most of the previous month’s gains in September but weakened slightly.
Other indicators suggest China’s economy gained momentum in recent weeks. World Economics’s all sector Sales Growth Index for China increased to 53.1 in September, a six-month high.
The Emerging Industries PMI, which some economists see as a leading indicator for China’s official manufacturing PMI, increased to 54 in September from 48.1 the previous month.
Based on those indicators as well as seasonal factors, Goldman Sachs Group economist Hui Shan predicts China’s manufacturing PMI will rise to 50.2 in September from 49.7 in August.
That would be the first reading above 50, which marks an expansion in output, since March. The PMI figures are due to be released on Saturday (Sep 30).
“Looking ahead, we expect the recovery to continue on the back of three tailwinds: the recent shift in fiscal stance, the stabilisation in exports and the property policy,” Larry Hu, Macquarie Group’s chief China economist, wrote in a note. BLOOMBERG
Share with us your feedback on BT's products and services
