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 declined for the third month in a row in June, dropping to 106.2 from 108.9 in May. This performance suggests that China is likely past the post-COVID peak of its business cycle and the economy is slowly falling back to values close to its long-term average.

The manufacturing sector in China continued to face downward pressures linked to rising producer prices and global supply change disruptions. China’s manufacturing PMI dropped to 50.9 in June, the lowest value since February and close to the threshold value of 50. After ending 13 months of positive y/y growth in May, automobile production declined even more aggressively in June, dropping by 16.9% on an annual basis. The automobile sector in the country has been harmed by the ongoing global shortage of semiconductor chips.

Growth of money supply accelerated again, increasing by 8.6% y/y in June from 8.4% in the previous month. The growth rate of financial institution deposits also followed a similar pattern, accelerating to 9.2% y/y in June. The recovery in the real estate sector continued to cool down, as floor space sold of commodity buildings in the period January-June 2021 increased by 27.7% y/y compared to 36.3% y/y growth in the period January-May 2021.

The smoothed CEIC Leading Indicator dropped for the fourth month in a row in June, to 108.5, suggesting that the moderation phase in the business cycle of China since February is persistent. Chinese GDP growth figures have been in line with the development of the CEIC Leading Indicator with a record peak in Q1 2021 followed by a moderation in Q2.

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.