China Posts Lowest Business Sentiment on Record as Deflationary Pressures Rise - Entrepreneur Generations

Global Economic Analysis - Entrepreneur Generations - Markit reports China Posts Lowest Business Sentiment On Record. Data only dates to November of 2009, so that makes sentiment worst since the recovery.

However, sentiment is so low, I it's possible sentiment is worse that any time in the past 20 or even 30 years, had it only been measured. Let's take a look at the report.

The latest Markit Business Outlook Survey signalled the weakest level of optimism amongst Chinese companies since data collection began late-2009. This was highlighted by a net balance of just +17% of firms expecting business activity to rise over the next year, down from a previous low of +23% in June.

Average input prices faced by Chinese businesses are expected to rise only slightly over the coming year. A net balance of just +3% of firms forecast higher input costs in October, down from +9% in June, to signal the weakest inflation expectations in the series history.

At the sector level, manufacturers anticipate a fall in cost burdens (net balance of -6%). This is the first time deflation has been forecast in the sector since mid-2012. In contrast, service sector companies expect input costs to increase over the next year, though October’s net balance of +14% is the lowest for a year.

China Business Expectations



Deflationary Pressures Rise

This report is fresh on the heels of severe deflationary pressures for manufacturers.

For details, please see China's PPI Drops 44th Month, Chinese Trade Slumps on Waning Demand, Deflationary Pressures.

Mike "Mish" Shedlock

Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://ift.tt/xbXsM8 to learn more about wealth management and capital preservation strategies of Sitka Pacific.

from Mish's Global Economic Trend Analysis http://ift.tt/1HFg0Lv China Posts Lowest Business Sentiment on Record as Deflationary Pressures Rise - Entrepreneur Generations

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