Conflicting reports out of China continue to keep luxury investors wondering if the “immune” part of retail is about to crack.
Want to know what’s going on with the luxury consumer? Which indicator should investors rely on more: China’s factory activity or the number of Swiss watches being exported. The current picture is a little blurry.
The HSBC Purchasing Managers Index showed Thursday manufacturing in China continued to contract for the eighth-consecutive month. This comes on top of recent interest-rate cuts, the first since 2008 as data continues to point to growth slowing.
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However, today we saw some encouraging headline news from luxury. Swiss watch exports increased 16.2 percent in May after posting a disappointing 7.9-percent increase in April. That is a pretty significant data point for luxury, considering the Chinese account for about one third of global watch sales, not to mention China is neck-and-neck in competition with Japan to be the second-largest luxury player.
via Signals From China Keep Luxury Investors Guessing – US Business News – CNBC.