Business Confidence at a Six-Year-Low

The RMB/BER Business Confidence Index fell 2 points to a level of 36 in 4Q 2015.

This means that only 36% of respondents are satisfied with current business conditions, the lowest since 2009. The index was pulled down by a deterioration in confidence among new vehicle dealers, wholesalers and building contractors. New vehicle dealer confidence fell from 27 to 19, a six year low. This reflects the on-going decline in vehicle sales as well as pressure on margins. Despite declining, wholesalers confidence remained highest of all five sectors at 19. On the upside, retailer confidence improved slightly to a level of 40, while manufacturer confidence was unchanged at 34.

This lack of confidence supports our view that business fixed investment and employment growth will remain muted next year.

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