With the PMIs being a sequential indicator by definition, today’s numbers suggest the sequential pick-up of economic activities since the Chinese New Year has come to an end, in our opinion. One reason for this seems to be a sequential weakening of property sales – as shown in the daily figures for 12 cities in Fig 3, housing sales reached a peak in late-March but have stepped down afterward, particularly in May, although on a YoY basis we continued to see positive growth. The other issue at play could be a more cautious tone on monetary policy, with the April liquidity figures down sharply from March and a year ago and the “authoritative figure” sounding reserved about the effects of government stimulus on growth.
As expected. Farewell Chinese boomlet.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
