Westpac's China MNI decreases confidence

The Westpac MNI China Consumer Sentiment Indicator decreased by 8.5pts from 118.2 in September to 109.7 in October. The Indicator is now 1.1% lower than a year ago and 8.8% below its long run average.

While the October survey was conducted against China's slightly more stable financial backdrop than was the case in previous months, the flow of information on the real economy has clearly soured. All told, the fact that confidence is now 1.1% lower than a year ago feels about right, whereas the September print of +4.4%y/y felt a bit rich.

"Each of the five components of the CSI decreased in October. The largest falls were in 'business conditions next 12mths' and 'business conditions next 5yrs', reflecting the primacy of the broader economy in the evaporation of confidence", notes Westpac. 

'Family finances vs a year ago' and 'family finances next 12mths' fell by 5.3pts and 7.3pts respectively . 'Time to buy a major household item' was the most resilient component of the headline at -4.1pts. 'Current business conditions' (not part of the headline, but highly correlated with the PMIs & official IP) also fell heavily.