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 which 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.

In June, the CEIC Leading Indicator for China continued its acceleration albeit at a slower pace. Since its trough in February 2020 when the indicator fell to 62.3, the lowest value since the 2008-2009 financial crisis, the indicator has been growing continuously and in June the figure reached 111.5, the highest reading since March 2017. Nevertheless, there has been a considerable moderation of the growth pace as lower base effects from the poor performance in January and February, when the COVID-19 hit China the hardest, are starting to fade. As a result, the CEIC Leading Indicator grew by a mere 1.1 points m/m in June, compared to a growth of 8.2 points m/m in May and 20 points m/m in April.

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Automobile production in China continues its rebound, growing by 17.9% y/y in June and moving closer to pre-pandemic levels. Money supply M2 has also been increasing consistently in the past three months, at a steady pace of 11.1% y/y each month, according to People’s Bank of China data. Floor space sold in China grew more modestly, by 2.1% y/y compared to a strong 9.7% y/y in the previous month, and its aggregate performance in H1 2020 is still below the same period of 2019. NBS’ manufacturing PMI reached 50.9% in June, staying above the 50% neutral value for four months in a row, displaying the returning confidence in China’s manufacturing sector.

The smoothed CEIC Leading Indicator for China also continued to increase, reaching 109.1 in June 2020, a peak performance since early 2017, similarly to the non-smoothed indicator. The smoothed indicator slipped to 84.9 in January and to 85.5 in February, the lowest level since 2015 but still higher than the trough during the 2008-2009 Great Recession. After the shock due to the COVID-19 pandemic, the smoothed leading indicator picked up growth momentum quickly, reaching levels of 89.3, 95.2 and 102.1 in March, April and May, respectively. This strong performance gave signals of the Chinese economy returning to growth in Q2 2020, which was eventually confirmed by a GDP growth of 3.2% y/y.

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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