Economists at Standard Chartered Bank (China) looked at some big-data and high-frequency indicators to gauge the impact of the coronavirus outbreak on China’s real economy.
“The Baidu Migration Index is a helpful tracker of returning labour force and can be used as a leading indicator of real activity. Big data shows that in the 10 key cities/provinces we tracked, only c.30% of all migrant workers had returned to their workplace as of 10 February. However, a turning point seems to have been reached over the past weekend (based on the Daily Migration Index), with more people expected to get back to their workplace in the coming days. Still, real activity may recover only in late February (based on the Travel Intensity Index), when the quarantine period for travellers is over.”
“We also found that the manufacturing sector had the lowest return ratio of migrant workers, while upstream energy producers were less affected. This suggests that the manufacturing sector could be significantly affected after the holidays, following the hit to the services sector during the holiday season. The delay in operations due to a lack of workers could also put significant pressure on small enterprises and exporters. Consumption has been hit hard, with severe disruptions to the catering and travel industries; we see no signs of a recovery yet. Online retail sales appear more resilient and fell for a shorter period; however, this cannot compensate for the loss in traditional retail sales. Daily average coal consumption for electricity production remains at low levels, suggesting weak production activity.”