Indicators

Nonstop news, surging amounts of data... Too much information is as unhelpful as it is useless. W&P separates the noteworthy from the noisy. Sometimes very compactly. For example, we developed a set of telling economic indicators to illuminate some dynamics that shape the economy. We present two of them here.


W&P GDP Growth Stat for China

W&P GDP Growth Stat for China
Source: Thomson Reuters Datastream, Wellershoff & Partners

Chinese cyclical outlook continues to worsen

Zurich, January 15, 2019

According to the W&P GDP Growth Stat for China, which is based on bottom-up, sector-specific data, the Chinese economy grew by 6.1 percent YoY in the fourth quarter of 2018.

The Chinese economy lost some momentum towards the end of 2018. Our growth estimate for Q4 stands at 6.1 percent YoY and coincides with our long-term trend growth estimate. While we do not see any immediate cause for concern, the recent decline in economic activity does give us pause.

As can be deduced from decreasing corporate profits, Chinese industry has developed particularly weakly as of late. What is more, recent production figures from more export-oriented industrial firms might have been boosted by special effects, such as a weaker renminbi and foreign customers ordering early in order to circumvent US tariffs. Export figures from December seem to indicate that this artificially-induced spike is coming to an end.

It remains to be seen whether the countermeasures taken by the Chinese authorities will be enough to halt this negative development. Chinese growth in the coming months might depend on it. At least the construction sector seems to be profiting from the stimulus already. Local demand for glass, cement and steel (all of which are reliable leading indicators for the construction sector) have risen recently. However, since new building projects would have to be financed by credit, and local governments as well as businesses are already laden with debt, the Chinese government seems to have realized that potential debt limits are being reached here. Accordingly, the government has started to lower taxes on consumers in an attempt to reinvigorate consumer sentiment. Unfortunately, making consumers spend more is not as easily achieved as commencing a new infrastructure project

Doubts about the reliability of the official GDP statistics among investors and other China-watchers are widespread and have increased in recent years. In response, the W&P GDP Growth Stat for China offers an alternative statistical indicator to capture China’s GDP performance. Please contact us for monthly updates on the W&P GDP Growth Stat for China and further research and insights based on it. Details and background information are to be found in the Critical Perspectives attached below.

Contact

Dr. Adriel Jost
+41 44 256 10 32
adriel.jost@wellershoff.ch


W&P Economic Indicators

W&P Economic Indicators
Source: European Commission, Thomson Reuters Datastream, Wellershoff & Partners

The W&P Economic Indicators : a safe bet

Which regions currently affect global economic sentiment the most? How confident are French consumers and where does the Mexican export sector stand? Investigating sentiments is one of the most important branches of modern cyclic analysis. Be it the export, construction or industrial sector, we always have an informative indicator at the ready.

Our offering extends over a whole range of leading indicators including more than 30 economies and regions. We are pleased to offer you access to our economic indicators or compute tailor-made indicators, for example, according to the relative importance of your own sales markets.

Contact

Dr. Adriel Jost
+41 44 256 10 32
adriel.jost@wellershoff.ch