China’s retail sales rose more than expected in October, even as fixed asset investment remained sluggish, according to data released Monday by the National Bureau of Statistics.
October retail sales grew by 4.9% from a year ago, beating a Reuters’ poll forecasting 3.5% growth, and faster than the 4.4% rise in September.
The better-than-expected retail sales in October came during a month that kicked off with China’s last big public holiday for the calendar year. However, significant drivers of retail sales such as autos and apparel declined in October from a year ago.
Industrial production also beat expectations, up by 3.5% year-on-year in October. Reuters had predicted 3% growth.
From January to October, fixed asset investment rose by 6.1% from a year ago, slightly less than the 6.2% rise projected in a Reuters’ poll.
On a monthly basis, fixed asset investment was dragged down by a 5.4% year-on-year decline in real estate investment last month, according to estimates from Tommy Wu, lead economist at Oxford Economics.
“Economic momentum remained weak in October, with the real estate downturn weighing on industry and a new wave of Covid outbreaks dampening household consumption,” Wu said. He expects the downturn in property to be contained, but still drag down growth in industrial production.
“While electricity shortages and production cuts hampered output in early October, we don’t think they are a significant problem anymore, following a range of policy measures to boost coal production and lower coal prices,” Wu said.
In the last two years, Chinese regulators have sought to reduce the real estate industry’s reliance on debt for growth.
Major real estate developers like Evergrande have teetered on the brink of default, raising concerns among global investors about potential fallout in the world’s second-largest economy. Property accounts for about a quarter of China’s GDP.
Prices for new homes in more than 50 of 70 major Chinese cities declined in October from the prior month, the statistics bureau said Monday.