Covid lockdown weighs on retail, industrial production data

Kovid’s continued expansion and consequent stay order – initially in Shanghai – forced factories to close or operate with limited power in April. Here is a picture of a refrigerator factory in Hefei, China, about five hours from Shanghai on May 12.

Ji Chen | Visual China Group | Getty Images

BEIJING – China reported lower retail sales and industrial production in April – much worse than analysts had expected.

Retail sales fell 11.1% in April from a year earlier, more than the 6.1% fall predicted in a Reuters survey.

Industrial production fell 2.9% in April from a year earlier, in anticipation of a slight increase of 0.4%.

Last month, Kovid’s continued expansion and consequent stay-home orders – primarily in Shanghai – forced factories to close or operate with limited power.

For the first four months of the year, fixed-asset investment increased by 6.8% compared to a year earlier, with the expectation of 7% growth slightly missing. Investment in real estate fell 2.7%, with manufacturing up 12.2% and infrastructure up 6.5%.

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

Unemployment in China’s 31 largest cities rose to a new high of 6.7% in April, according to 2018 data.

The city-wide unemployment rate rose 0.3 percentage points to 6.1% from March to April. The unemployment rate among 16- to 24-year-olds is almost three times higher at 18.2%.

Demand for this specialty has grown significantly as a result of recent corporate scandals.

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

However, McCurry’s chief China economist Larry Hu said he hoped the decline in credit demand would be short-lived. He noted that on Sunday, the central government took “first steps to save property …” by lowering mortgage rates for first-time home buyers.

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

“Today’s cut is not enough to turn the property sector around, but more property facilitation will come,” Hu said in a note on Sunday.

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

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

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