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, which anticipates turning points of the business cycle, declined for the sixth month in a row in September to 99.71, dropping below the long-term average of 100 for the first time since April 2020.

China’s official manufacturing PMI, dropped below the threshold level of 50 for the first time since February 2020, as manufacturers struggled with the surging raw material costs and ongoing power shortages. As the high base effect from last year has faded, automobile production declined by 17.72% y/y in September. Growth of money supply accelerated, increasing by 8.26% y/y in September from 8.21% in the previous month. The expansion of financial institution deposits also accelerated to 8.58% y/y from 8.29% y/y in August. Affected by tighter regulations, China’s real estate sector continued to cool down, as floor space sold of commodity buildings in the period January-September 2021 increased by 11.33% y/y compared to 15.95% y/y growth in the period January-August 2021.

The smoothed CEIC Leading Indicator also fell below 100 for the first time since June 2020. In September, the reading was only 99.3, compared with 101.09 in the previous month. The below 100 value suggested that China is performing below the long-term average and the economy faces increasing pressure for the rest of the year as well as Q1 2022.

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