(Bloomberg) — China’s economic activity lost more steam in July with manufacturing contracting again and the services sector weakening, as Beijing promises small measures of support to boost consumption.
Economy
China Economic Recovery Weakens, Spurring Measures From Beijing
The Hang Seng China Enterprises Index rose as much as 3.2% on Monday, outperforming major regional stock gauges. The yuan traded offshore advanced as much as 0.3% to a session high at 7.1329 per dollar.
Concerns about the state of China’s recovery have been mounting in recent weeks, with early indicators for July showing a weakening of momentum. Economists polled by Bloomberg project growth of 5.2% for 2023, lower than earlier forecasts and more in line with the official target of around 5%.
- New manufacturing export orders continued to decline, with the subindex inching down to 46.3 from 46.4 in the previous month
- An employment subindex remained in contraction for a fifth straight month
- A sub-index measuring non-manufacturing employment crept down to 46.6 from 46.8 in the previous month
“What worries me is that the employment sub indexes continue to stay below 50 and show no sign of recovery,” said Raymond Yeung, chief economist for Greater China at Australia & New Zealand Banking Group Ltd. He expects unemployment pressures to remain in the near term as millions of graduates join the labor market.
Companies reported an external environment that remains “complex and grim,” Zhao Qinghe, senior statistician at the NBS, said in a statement accompanying the data. “Reducing overseas orders and insufficient demand are still the main challenges for companies.”
What Bloomberg Economics Says …
“July PMIs suggest China’s overall economic momentum stayed weak at the start of 2H, but the underlying composition is shifting. The gauge tracking services showed unexpected deterioration, with the drag from the property slump outweighing the push from a brisk summer travel season.
— Chang Shu and Eric Zhu, economists
Read the full report here.
Adding to existing strains on the economy is extreme weather, with heat waves baking northeastern cities including Beijing and spreading to central coastal regions, while the southwest has been hit by heavy rain and deadly floods. The weather problems threaten to put stress on the energy grid and disrupt logistics, as well as production.
“While we believe that a great many micro measures will be implemented to improve the functioning of the economy, including a reduction in constraints on the private sector, we aren’t at all convinced that there is a fiscal bazooka waiting to fire up the economy,” wrote Robert Carnell, regional head of research for Asia Pacific at ING Groep NV.
—With assistance from Wenjin Lv and Tan Hwee Ann.
(Updates with market reaction, comments, more context.)
Economy
S&P/TSX composite gains almost 100 points, U.S. stock markets also higher
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press. All rights reserved.
Economy
Statistics Canada reports wholesale sales higher in July
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
The Canadian Press. All rights reserved.
Economy
S&P/TSX composite up more than 150 points, U.S. stock markets mixed
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press. All rights reserved.
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