Second quarter GDP by industry: high growth in finance and manufacturing, K-shaped differentiation intensified (Nomura)
Nomura’s report revealed that GDP in the second quarter showed obvious K-shaped differentiation by industry.
Nomura’s report revealed that GDP in the second quarter showed obvious K-shaped differentiation by industry. The nominal GDP growth rate of the manufacturing and financial services industries was nearly 9% year-on-year, while the real estate and construction industries were in deep contraction. The report also pointed out that behind the high growth of the financial services industry are contradictions such as declining commission rates, slowing credit growth, and pressure on banks’ net interest margins. This means that the "ice and fire" in the economic structure is intensifying. The traditional growth engine (real estate) has stalled, while the emerging engine (high-end manufacturing) is not large enough to fully hedge. The market had already expected this differentiation, but the data further confirmed the depth. The investment logic is that simply looking at total GDP data may conceal structural problems. Investment should focus on structural growth areas and avoid real estate chain-related assets. One-sentence conclusion: The second quarter GDP data confirms the intensification of K-shaped economic differentiation. High-growth industries and deep-shrinking industries coexist, and structural investment opportunities are greater than total opportunities. Positive/negative: Positive for high-end manufacturing, AI-related and financial services sectors; negative for real estate, construction and traditional cyclical industries. The market is currently aware of this differentiation phenomenon, but the pertinence of subsequent policies will determine the degree of differentiation. Catalysts: 1) The Politburo meeting in July will set the tone for industrial policies; 2) Further support policies for the real estate industry in the second half of the year.