November events drive steady improvement in overall economic sentiment

Table tennis events at the 15th National Games, Galaxy Arena, last week

The latest economic sentiment index from the Macau Economic Association suggests steady improvement in overall economic sentiment, with projections indicating the index will remain within the 6.0-6.2 range for the fourth quarter.

The projections are largely due to a robust lineup of year-end events and major activities, which are expected to boost the city’s vibrancy and consumer enthusiasm through the end of the year and into early next year.

The year-end period in Macau is typically filled with major events and activities, including the National Games, the Macau Grand Prix, and the Macau Food Festival in November, all of which are expected to further enhance the city’s appeal and consumer spending.

According to the latest monthly forecast from the association, “the economic climate index for Macau is projected to remain within the 6.0-6.2 range from November to January, indicating a steady improvement in overall economic conditions.”

This projection marks a revision from last month’s estimate that the fourth-quarter index would also fall within the same range. The report added that “the overall economic outlook is anticipated to remain stable through year-end, with current indications suggesting sustained, positive growth.”

The latest economic climate index reveals that overall economic indicators remained stable between September and October, with the indices registering 6.0 and 6.4, respectively. “Synchronous indicators remained within the ‘stable’ to ‘slightly overheated’ range, while leading and lagging indicators exhibited polarized conditions, ranging from ‘overheated’ to ‘sluggish,’” the report stated.

This stability is attributed to high daily average visitor arrivals and gaming gross revenue in September, with hotel occupancy reaching 37,000 guests and an occupancy rate of 84.6%.

The report added that October’s performance was further enhanced by mainland China’s Golden Week holiday, resulting in record highs in several indicators, including daily gross gaming revenue, which peaked at MOP777 million.

The report highlights that local consumption, credit, and investment confidence remain relatively weak, with the loan-to-deposit ratio and residential property price index continuing to decline, categorizing them as “poor” and “depressed,” respectively.

Citing data from the Macau Monetary Authority, it noted that the banking sector non-performing loan ratio rose by 0.21 percentage points year-on-year to 5.44% in September, totaling MOP55.534 billion. Notably, the non-performing loan ratio for the household segment reached a new high since November 2004, at MOP23.191 billion.

As satellite casinos gradually close this month, the association expects that the valuations and repayment capabilities of surrounding commercial properties may decline.

Meanwhile, residential and office property prices continue to fall, potentially impacting the quality of bank assets – “a development that has garnered significant public attention,” it stated.