China: Exports support output as property drags – DBS
DBS Group Research forecasts an improvement in China’s industrial production to 5.0% year-on-year in August, helped by strong export growth driven by AI-related electronics. However, Taimur Baig and Chang Wei Liang expect retail sales to stay subdued, and see further weakness in fixed asset investment as the property downturn and shift to completed-home sales weigh on activity.
External demand offsets weak property sector
"Industrial production is expected to improve from 4.5% yoy in July to 5.0% in August, supported by strong exports."
"Export growth edged up from 23.9% yoy in July to 25.0% in August, amid robust demand for AI-related electronics."
"However, on domestic front, retail sales growth is expected to remain subdued at 0.4% in August, partly due to a high base from last year’s trade-in subsidy programmes."
"On the investment side, the decline in fixed asset investment is expected to expand further from -6.7% yoy ytd in July to -7.0% yoy ytd in August."
"China’s shift from presales towards completed-home sales is likely to weigh on near-term investment, land acquisitions and project starts, particularly among highly leveraged private developers."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
