China's LEI falls again, recession signals flash in August: TCB

The Conference Board Coincident Economic Index (CEI) for China increased by 0.5 per cent in August 2025 to 156.1, after expanding by 1.1 per cent in July. Overall, the Index grew by 3.8 per cent over the six-month period from February to August 2025, dwarfing the 0.2 per cent growth observed over the previous six-month period between August 2024 and February 2025, TCB said in a press release.

“The China LEI declined again in August, marking its eighth consecutive monthly drop in 2025. Medium and long-term loans bolstered the index, however, widespread weakness from remaining 7 components weighed negatively on the LEI,” said Timothy Brennan, economic research associate, at The Conference Board.

“Notably, consumer confidence has been depressed since April 2022 and continued to be the main drag on the Index. With the negative semi- and annual growth rates of the LEI pointing to headwinds and with the 6-month diffusion falling below 50, the recession signal went off again in August. Despite the 90-day extension of the tariff pause on August 11, China’s economy continues to grapple with weak domestic demand, declining manufacturing activity, and persistent global uncertainties. As such, The Conference Board currently forecasts annual real GDP growth to between 4.5 per cent and 5 per cent in 2025,” added Brennan.

The index showed that financial components, particularly medium and long-term loans, provided only a modest positive contribution, while non-financial indicators weighed heavily on the outlook.

The sharpest drag came from weak consumer expectations, followed by declines in logistics, new export orders, and industrial profitability. Labour market demand subdued, highlighting that despite some credit support, confidence, trade, and property weakness continue to dominate economic signals.

ALCHEMPro News Desk (SG)