China’s exports are set to have contracted at a slower pace in August, analysts have forecasted, as the country’s manufacturers continue to struggle to catch up after outbound shipments recorded their worst performance since February 2020 last month.
Data for August is expected to show a 9.2% fall in exports from a year earlier, following a drop of 14.5% in July, according to the median forecast of 33 economists in the poll.
Barclays and Nomura were the most bearish, forecasting that overseas demand for Chinese goods worsened last month and are predicting a 15% drop in exports, while Standard Chartered forecast exports fell by just 4%.
Chinese factory activity shrank for a fifth straight month in August, weighed down by a lack of new export orders and imported parts, although factory owners indicated producer prices had improved for the first time in seven months, in a nod to improving domestic demand.
Policymakers have introduced a series of measures in recent months to shore up growth, with the central bank and top financial regulator last week easing some borrowing rules to aid homebuyers.
But analysts warn these measures may struggle to move the needle amid a slowing labour market recovery and uncertain household income expectations.
Imports are expected to have shrunk by 9.0%, after dropping 12.4% in July, reflecting slightly improved domestic demand.
But South Korean shipments to China, a leading indicator of China’s imports, dropped 27.5% last month, worsening from a 25.1% fall in July.
The median estimate in the poll indicated that China’s trade surplus would shrink, with analysts predicting it will come in at $73.80 billion, compared with $80.6 billion in July.
China’s trade data will be released on Thursday.
- Reuters with additional editing by Sean O’Meara