Categories: Business

Covid lockdowns weigh on retail, industrial production data

[ad_1]

The persistent spread of Covid and resulting stay-home orders — primarily in Shanghai — forced factories to close or operate at limited capacity in April. Pictured here on May 12 is a refrigerator factory in Hefei, China, about a five hours’ drive from Shanghai.

Xie Chen | Visual China Group | Getty Images

BEIJING — China reported a drop in retail sales and industrial production in April — far worse than analysts had expected.

Retail sales fell by 11.1% in April from a year ago, more than the 6.1% decline predicted in a Reuters poll.

Industrial production dropped by 2.9% in April from a year ago, in contrast with expectations for a slight increase of 0.4%.

Last month, the persistent spread of Covid and resulting stay-home orders — primarily in Shanghai — forced factories to close or operate at limited capacity.

The “increasingly grim and complex international environment and greater shock of [the] Covid-19 pandemic at home obviously exceeded expectation, new downward pressure on the economy continued to grow,” the statistics bureau said in a statement. The bureau said the impact of Covid is temporary and that the economy “is expected to stabilize and recover.”

Fixed-asset investment for the first four months of the year rose by 6.8% from a year ago, slightly missing expectations of 7% growth. Investment in real estate declined by 2.7%, while that in manufacturing rose by 12.2.% and that in infrastructure rose by 6.5%.

China’s passenger car production dropped by 41.1% year-on-year in April, according to the China Passenger Car Association. The auto sector in China accounts for about one-sixth of jobs and roughly 10% of retail sales, according to official figures for 2018 compiled by the Ministry of Commerce.

The unemployment rate in China’s 31 largest cities climbed to a new high of 6.7% in April, according to data going back at least to 2018.

The unemployment rate across cities rose by 0.3 percentage points from March to 6.1% in April. The jobless rate among those aged 16 to 24 was nearly three times higher at 18.2%.

For an additional sense of the scale of economic slowdown in April, other data showed a slump in business and household demand for loans.

Read more about China from CNBC Pro

Total social financing — a broad measure of credit and liquidity — roughly halved last month from a year ago to 910.2 billion yuan ($134.07 billion), the People’s Bank of China said late Friday.

However, Macquarie’s Chief China Economist Larry Hu said he expected the drop in credit demand would be short lived. He pointed out that on Sunday, the central government took its “first action … to save property” by cutting mortgage rates for first-time homebuyers.

The rate, which used to follow the five-year loan prime rate as a benchmark, is now 20 basis points below that.

“Today’s cut is far from enough to turn the property sector around, but more property easing would come,” Hu said in a note Sunday.

Real estate and related industries account for about a quarter of China’s GDP, according to Moody’s.

This is a developing story. Please check back for updates.

[ad_2]
Source link
Admin

Recent Posts

Super Slot Games Review

Super slots provide the pinnacle of casino gaming with their interactive bonus rounds, captivating graphics,…

4 months ago

The Evolution and Impact of  Nanomedicine

Introduction to Nanomedicine Nanomedicine, a subfield of nanotechnology, involves the application of nanoscale materials and…

4 months ago

Chumba Online Casino Review

Chumba Casino provides an extraordinary online gaming experience. Its sweepstakes model allows players to win…

5 months ago

How to Find the Best Online Casinos to Play For Free

Online casinos provide quick, simple, and highly convenient gambling experiences for their players. Offering a…

5 months ago

How to Achieve a Flawless Complexion with the Right Products

Achieving a flawless complexion is a common skincare goal. With the right face care products, you can enhance…

5 months ago

Creating Ideal Matches: The Mutual Selection of Clients and Businesses

Shared values and goals, transparency, understanding each other's needs, communication, and respecting boundaries are vital…

5 months ago