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China economy picks up as consumer sentiment rises to five-month high

PUBLISHED : Tuesday, 04 December, 2012, 10:40am
UPDATED : Friday, 08 May, 2015, 9:46am
 

Consumer sentiment in China has risen to its highest level in almost five months, a new survey showed on Tuesday, further evidence of signs of a pickup in the world's second largest economy.

The MNI China Consumer Sentiment Indicator rose to 95.5 in November from 92.3 in October, marking a second straight month of gains, according to the report issued by MNI, a unit of Deutsche Boerse Group.

The group said the gains were broad-based, including current personal finances, the economic outlook, and the willingness to purchase household durable goods.

Only the outlook for personal finances declined during the month, with comments from some higher income respondents complaining about the worsening economic environment.

“Salary increases don’t match price increases. Salaries have doubled but CPI (consumer price index) is up fourfold. I am not thinking about buying a car,” one respondent told MNI, giving his name only as Zhang.

Both current and future indicators improved in November. The current indicator rose to 98.7 from 93.6 the previous month, while expectations rose for the third consecutive month, to 93.7 from 91.6.

Consumers’ willingness to buy large household items rose in November to its highest since May 2011, after dropping each of the previous three months. Moreover, car purchase sentiment rose again in November, with morale improving among so-called middle-income respondents.

“Per-capita income has indeed increased. I am not worried about economic growth. It will rise further in the future,” Long, a Beijing middle-income respondent told the survey.

Sentiment on the real estate market increased to 110.1 from 109.8, the first gain since January, amid growing confidence that the government would not tolerate a collapse in property prices despite its efforts to stem runaway price growth.

The number of consumers saying it was a good time to buy a house increased marginally in November, with the outlook for housing prices rising for the second straight month.

Car purchase sentiment rose to the highest level since March, as Japanese car sales started to recover.

Recent economic numbers from China have been mixed. China’s annual economic growth dipped to 7.4 per cent in the third quarter, slowing for seven quarters in a row and leaving the economy on course for its weakest showing since 1999.

However, many analysts expect the economy to snap out of its longest downward cycle since the global financial crisis, and start to trend upwards in the fourth quarter.

On Monday, the final reading for the HSBC Purchasing Managers’ Survey (PMI), a survey of private factory managers, found further evidence that the economy is reviving.

The final reading for the HSBC Purchasing Managers’ Survey (PMI) rose to 50.5 in November from 49.5 in October, in line with a preliminary survey published late last month. It was the first time since October 2011 that the survey crossed above 50 points, the line that demarcates accelerating from slowing growth.

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