China’s fixed-asset investment likely picked up slightly in Jan – Jul, real estate remained biggest drag – analysts
MACRO VIEWS & ANALYSIS
China’s fixed-asset investment likely picked up slightly in Jan – Jul, real estate remained biggest drag – analysts
MACRO VIEWS & ANALYSIS

China’s fixed-asset investment likely picked up slightly in Jan – Jul, real estate remained biggest drag – analysts

 

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China’s fixed-asset investment is expected to grow by 3.9% year over year in the period of January – July, accelerating slightly by 0.1 percentage point from the first six months of the year, according to the average estimate by economists at 15 domestic and overseas institutions. They expect the growth to be in the range of 3.6% – 4.2%. 

UBS believes that China’s fixed-asset investment growth will slow to 2.3% year over year in July, dragging down the growth in Jan – Jul to 3.6%.

In breakdown, as local government special-purpose bond issuance slowed in July and the support from the earlier issued special-purpose bonds and policy and development financial tools faded, the growth of infrastructure investment may slow to 10% in July, and manufacturing investment likely grew 6% in July, in line with June, on the back of policy support and narrower profit decline, it said.

Real estate investment likely declined 10% due to continuous drops in property sales and weak land transactions, according to UBS. 

Nomura expects China’s fixed-asset investment to accelerate to 6.2% year over year in July from the 3.3% growth in July due to low base, which would boost the growth in the first seven months to 4.2%. 

Infrastructure and manufacturing investment is yet to show material improvement, but real estate investment’s decline likely slowed to 8.7%, though it remained the major drag, said Nomura.