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CN: Fixed Asset Investment
| Consensus | Consensus Range | Actual | Previous | |
| Month over Month | -1.42% | -0.37% | ||
| Year to Date on Y/Y Basis | -6.1% | -6.2% to -5.0% | -6.7% | -5.7% |
Highlights
Chinese fixed asset investment fell 6.7 percent on the year-to-date in June, weakening further from a fall of 5.7 percent in July and below the consensus forecast for a fall of 4.9 percent. On a sectoral basis, investment fell 1.7 percent in the manufacturing sector, 3.6 percent in the infrastructure sector, and 19.2 percent in the real estate development sector. In month-over-month terms, investment fell 1.42 percent in July after dropping 0.37 percent in June.
In their statement accompanying today's data, officials characterised the data as showing the economy"was generally stable". Although officials did not explicitly refer to the Iran conflict, they again expressed caution about the external environment, noting that it is"complex and volatile". Officials characterised their policies as"more proactive and effective", a slight change from last month's phrase of"more proactive and vigorous", but they provided no guidance about whether changes to policy settings will be considered in the near-term.
Market Consensus Before Announcement
Amazingly, it is getting worse! The consensus sees FAI down 6.1 percent on year in July after a decrease of 5.7 percent in June.
Definition
Investment in fixed assets refers to the investment in construction and purchase of fixed assets by private and state-controlled domestic enterprises and households (excluding rural households) involving a total planned investment of CNY5 million yuan or more. Separate data for private investment and state-controlled investment are published as well as more detailed data on an industry basis.
Description
Investment in fixed assets is an important part of gross domestic product and also provides the additional productive capacity to an economy that is required to drive future growth. Strong growth in this category of spending indicates that enterprises are confident about future prospects and is generally associated with rising employment and incomes.
Investment in fixed assets therefore provides information about near-term and future economic growth. Investors need to closely track the economic growth because it usually dictates how investments will perform. Investors in the stock market like to see healthy economic growth because robust business activity translates to higher corporate profits. Bond investors are more highly sensitive to inflation and robust economic activity could potentially pave the road to inflation. By tracking economic data such as GDP, investors will know what the economic backdrop is for these markets and their portfolios.