The high profile data releases of the last week have provided little evidence that growth in China is picking up, even though credit has now been expanding at a rapid pace for several months. But there are glimmers of hope in less closely-watched measures. One worth monitoring is April’s pick-up in sales of diggers and earth-moving equipment. Back in 2009, it took about six months for a turnaround in credit to be reflected in construction equipment sales. We argued then that these sales were a better measure of investment activity, particularly in infrastructure, than the flawed fixed investment data. Further increases in sales in the next month or two would provide strong evidence that a turnaround in activity was finally getting underway.
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