Chinese freight volumes hit as business softens

Chinese freight companies said conditions softened further in April, with fewer firms reporting rising volumes and profits. The headline FTCR China Freight Index, a composite reading of the results of a monthly survey of 200 logistics companies, fell to a nine-month low of 48.8 in April, below the level recorded during the lunar new year holiday lull. 

April’s reading indicates that freight activity is shrinking, if at a relatively slow rate. It stands in contrast to official and private-sector purchasing managers’ indices for the manufacturing and services sectors, all of which improved in March, fuelling hopes that the Chinese economy was stabilising after a soft patch — April readings are due this week. 

Just 16.6 per cent of respondents said their volumes increased on the previous month compared with 26.8 per cent in March. Year-on-year readings were even weaker, with almost a third of companies reporting that volumes were down, while our index comparing rates this month with April 2018 pointed to a marginal drop.

Although April’s data suggest the freight sector has lost some steam relative to the stability seen in previous months, an average reading for the first four months of 2019 suggests business continued to grow, if at a marginal rate. 

Markets have been rejoicing at official data showing that the economy performed better than expected in the first quarter of the year. However, the outlook remains choppy because of a relatively weak export sector, still-tight credit conditions in the housing market and the policy risks that stem from a government bureaucracy trying to resist providing too much stimulus to an economy experiencing a structural slowdown. 

The FTCR China Freight survey is based on interviews with 200 road, railway, waterway and air logistics companies. For further details, click here. This report contains the headline figures from the latest freight survey; the full results are available from our database

FT Confidential Research is an independent research service from the Financial Times, providing in-depth analysis of and statistical insight into China and south-east Asia. Our team of researchers in these key markets combine findings from our proprietary surveys with on-the-ground research to provide predictive analysis for investors

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