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Fast Comment ChinaProperty sector cool down weighs on growth

  1. Retail sales growth disappointed in October
  2. Services not captured by retail sales figures
Retail sales growth disappointed in October
Industrial production growth slowed a little more than expected in October as production related to construction and production in sectors affected by the ongoing crack down on pollution fell. Retail sales growth fell markedly despite that it was expected to have been buoyed by the mid-Autumn holidays where retail sales usually are strong, however, they fell in October this year compared to September last year. Investment growth also fell, driven by slowing property investment growth. Property sales also slowed further, underlining that the property boom is now finally fading as the many measures taken to dampen the property market are now kicking in.
Services not captured by retail sales figures
The slowdown in October follows a growth pick up in September so there is nothing dramatic about the weaker figures. With all October indicators falling, the slowdown appears broad-based. However, one should remember that the ‘new economy’ is badly captured in the official data as, for instance, services consumption is not measured by the retail sales figures. Still, we expect overall growth to slow further ahead.

Disclaimer

Bjarke Roed-Frederiksen

Senior Economist

Latin America and China

bjro03@handelsbanken.dk

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