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ANZ-Roy Morgan Chinese Consumer Confidence Declined to a New Low

The ANZ-Roy Morgan China Consumer Confidence survey elicits respondents' expectations of inflation and prices. Data in August was collected from a sample of 1,000 Chinese aged 14+ (12,000 per annum) by telephone. The survey is conducted in metropolitan and outer urban areas - not only are 1st, 2nd and 3rd Tier cities included, but Tier 4 cities are also surveyed every month. The robust, representative sample is stratified geographically, with quotas controlled by gender and age.
HIGHLIGHTS

  • ANZ-Roy Morgan China Consumer Confidence Index fell by 2.5pts to 138.5 in August, the lowest level on record.

  • In terms of personal finances, 40.7% (down 2.3ppts from July) of respondents said that their families are ‘better off’ financially in August compared with the same time last year. Meanwhile, 15.6% (up 3.1ppts) said that they are ‘worse off’. On the outlook for personal financial situation, 50.9% (down 5.4ppts) expect their families to be ‘better off’ next year, compared with 7.5% (down 1.3ppts) who expect conditions to be ‘worse off’.

  • On economic conditions, respondents who expect China to have ‘good times’ next year fell to 57.4% (down 1.7ppts) in August, while respondents who expect economic ‘bad times’ rose to 15.9% (up 2.7ppts). On longer-term economic performance, 65.6% (down 0.5ppt) expect China to have ‘good times’ and 15.0% (up 1.1ppts) said that there will be ‘bad times’.

  • In August, respondents who said that it is a ‘good time’ to buy major items now increased to 39.9% (up 2.9ppts), while respondents who said that it is a ‘bad time’ to do so remained at 8% (no change).

  • Inflation expectations rose to 3.79% (up 0.37ppts) in August.
ANZ’s Chief Economist for Greater China Li-Gang Liu said:

“The slowing economy continued to hurt China’s consumer sentiments in August as the Consumer Confidence Index reached another record low. Sub-indices reflecting consumers’ confidence on both financial situation and economy conditions declined to new lows, amid slowing economic growth and an increasingly volatile stock market.

"China’s July activity data suggest that growth momentum has seen little improvement in the first month of Q3, and if conditions do not improve in the coming months, China’s GDP could fall to below 6.5% in the quarter. Meanwhile, recent price increases for pork have driven up the headline CPI in July, and inflation expectations climbed in August. However, PPI deflation has continued for 41 consecutive months, indicating that the risk of deflation has not abated.

"Thus, we expect more easing policies to be launched. We believe that the central bank will further cut the reserve requirement ratio by 50bps, followed by a 25bps interest rate cut in Q3.”

ANZ-Roy Morgan Chinese Consumer Confidence - August 2015 - 138.5

ANZ-Roy Morgan Chinese Consumer Confidence Rating - August 2015 - 138.5

Click to view the latest ANZ-Roy Morgan Chinese Consumer Confidence Release PDF - August 2015.


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