Retail sales in China fall much more than expected, while industrial production disappoints

Retail sales in China fall much more than expected, while industrial production disappoints

Retail sales in China fall much more than expected, while industrial production disappoints

Several ‘robot arms’ work on the automated assembly line of the final wheel hub at a manufacturing workshop in Anqing city, Anhui province, China, 9 December 2022.

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BEIJING – China on Thursday reported economic data that fell short of expectations across the board during a month in which widespread Covid controls have weighed on growth.

Retail sales fell 5.9% in November from a year ago, the National Bureau of Statistics said.

That’s worse than expectations for a 3.7% drop, according to analysts polled by Reuters, and a larger drop than October’s 0.5% year-on-year decline.

Industrial production rose 2.2% in November from a year ago, missing Reuters’ forecast of a 3.6% increase. The reported pace was also slower than October’s 5% increase.

Fixed asset investment for the year to November slowed to 5.3% year-on-year growth, disappointing Reuters expectations for a 5.6% increase. The official press also fell compared to the 5.8% growth in the first 10 months of the year.

Infrastructure investment accelerated in November versus October year-on-year, while manufacturing investment slowed slightly. Investments in the real estate sector have declined at a steeper pace due to the continuing crisis in the sector.

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The unemployment rate in cities rose to 5.7% in November. The unemployment rate for 16-24 year olds remained much higher at 17.1%.

Declining retail sales drove the year-to-date total down 0.1% from the first 11 months of last year.

Food and medicines were the only sub-categories that saw sales growth in November compared to a year ago, according to the statistics office. Clothing and shoes recorded a 15.6% drop in sales.

Online sales of physical goods rose just 4% year over year in November, down sharply from the previous month, according to CNBC’s calculations on data accessible via Wind Information.

Radical changes of Covid

Over the past two weeks, China has notably lifted a number of Covid-related restrictions that had hampered domestic travel and business activities. Authorities have emphasized vaccinations for the elderly and encouraged Covid patients to recover at home.

Anecdotally, at least in Beijing, a significant proportion of the population have since fallen ill, if not tested positive for Covid, in sub-zero weather.

A day before the data release, China’s National Bureau of Statistics canceled its in-person press conference set for Thursday without explanation.

Read more about China from CNBC Pro

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