Output in the real-estate industry, a key economic contributor, contracted 2% in the first quarter from a year ago, China’s National Bureau of Statistics said in a report Tuesday. It was the steepest drop among all sectors, according to the bureau’s detailed breakdown of economic activity from January to March.
In March, new-home sales declined 29%, the biggest drop since the downturn began in July, according to official figures released Monday. That’s adding to the pain felt by cash-strapped developers, and putting pressure on policy makers to shore up an economy that’s facing weakening consumer spending and the highest unemployment rate since the early months of the pandemic.
China’s economy grew 4.8% in the first quarter, data showed, a stronger-than-expected acceleration that doesn’t capture the full extent of the damage from recent lockdowns. The financial and trade hub Shanghai began to restrict movement in March, but those curbs have stretched well into April.
Industrial output and investment held up from January to March despite the quiet Lunar New Year holiday and disruption from Covid outbreaks, according to Monday’s data. But the lockdowns began to weigh on consumer spending in March, as retail sales contracted for the first time since 2020. Catering revenue plunged 16.4% last month, the sharpest decline since mid-2020.
The surveyed jobless rate climbed to 5.8%, the highest since May 2020.
Output in the hotel and catering industry dipped 0.3% in the first quarter from a year ago, making it the second-worst performing sector. Rising Covid infections and the strict curbs to contain them began to dent consumer spending toward the end of the quarter.
Construction grew 1.4% in the same period, a pickup from the 2.1% contraction in the final three months of 2021. BM