On October 15th, the National Building Materials and Home Furnishings Index (referred to as "BHI"), jointly published by the Commerce Ministry's Circulation Department and the China Building Materials Circulation Association, unexpectedly surged to 130.29 in October. This marks a 9.47% increase compared to the previous quarter and an impressive year-on-year jump of 7.52%. It stands as the second-highest score recorded since the index's debut in March 2010, trailing only the 134.9 achieved in May 2010.
This sudden spike in BHI has drawn attention, particularly from Qin Zhanxue, Vice President of the China Building Materials Circulation Association, who described the situation as "unusual and unforeseen."
Throughout this year, the entire building materials and home furnishing sector has struggled with sluggish performance, with the BHI consistently hovering at low levels. In fact, in January, BHI plummeted to its lowest point at 85.74. Although it has gradually risen since then, it had never exceeded 120 until October, when it skyrocketed past 130, reaching a historic high just below the record set in May 2010. Meanwhile, the sales figures of major home furnishing stores also showed a significant boost. Data from the China Building Materials Distribution Association reveals that sales in October amounted to 142 billion yuan, marking a robust 20.28% increase from the previous quarter. However, year-to-date sales for January through October came in at 1,039.1 billion yuan, still reflecting a 4.6% decline compared to the same period last year.
The surge in BHI can largely be attributed to the recent回暖 in the property market. As the downstream industry of real estate, building materials and home furnishings naturally benefited from the improved sentiment in the real estate sector. The sharp rise in BHI in October could be seen as a positive sign for the industry's recovery. Yet, Qin Zhanxue cautioned that vigilance is necessary, as the excessive growth in October might lead to an overextension of consumer purchasing power and interest in subsequent months. Businesses and retailers must prepare for potential shifts in the market. Overall, the industry's challenges have not yet dissipated entirely.
In summary, while the temporary boost in the building materials and home furnishing sector may signal a promising trend, it remains crucial for stakeholders to remain cautious and adapt to possible changes ahead.
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