The CEIC Leading Indicator is a proprietary dataset designed by CEIC Insights to precede the development of major macroeconomic indicators and predict the turning points of the economic cycle for key markets. It is a composite leading indicator that is calculated by aggregating and weighting selected leading indicators covering various important sectors of the economy, such as financial markets, the monetary sector, labour market, trade, and industry. It is developed through a proprietary CEIC methodology and employs data from the CEIC database. The CEIC Leading Indicator currently covers eight regions – Brazil, China, India, Indonesia, Russia, the Euro Area, Japan, and the United States.

The CEIC Leading Indicator for China  plunged further to 109.1 in May, marking the second straight month of decline. The value is still over 100, suggesting that the economy is performing above the long-term trend. However, starting from April, we saw China’s economic recovery entering a more stable phase, as suggested by the moderation of key variables under the CEIC Leading Indicator.

The manufacturing sector faced downward pressure among weak domestic demand, surging raw material prices, and global supply chain disruptions. China’s manufacturing PMI dropped slightly in May to 51, still above the 50 threshold and indicating expansion. Automobile production ended 13 months of positive y/y growth and registered a 6.74% y/y decline in May. The slowdown in credit growth stabilized as policymakers tried to avoid sharp policy turns.

In May, money supply M2 increased by 8.35% y/y, matching the pace in April. The growth rate for financial institution deposits barely changed in May. In the first five months of 2021, China’s utilised FDI grew by 39.78% y/y, slightly below the first four months, maintaining its sound pace. The real estate sector sees signs of cooling. From January to May, floor space sold of commercial buildings increased by only 36.3% y/y, a sharp decline from the 48.08% y/y growth rate from January to April.


The smoothed CEIC Leading Indicator stood at 111.8 in May, the lowest value since January 2021, after having declined for two months in a row. Despite the recent outbreaks of COVID-19 in the Pearl River Delta, the growth outlook for China remains optimistic as vaccine rollouts accelerate and the labour market improves, helping the economy to gradually shift towards a consumption-driven recovery.

 

Keep informed each month on the predicted turning points of the economic cycle for key markets with our free, proprietary CEIC Leading Indicator. Learn more and register here.