Factory output beats forecasts, retail sales on growth path

BEIJING • China's factory output rose faster than expected last month and retail sales continued to recover albeit at a slower-than-forecast pace, as the world's second-largest economy emerged from its Covid-19 slump.

Industrial output climbed 6.9 per cent last month from a year earlier, data from the National Bureau of Statistics (NBS) showed yesterday, in line with September's gain. Analysts polled by Reuters had expected a 6.5 per cent rise.

The upbeat figures came as other Asian economic powerhouses also climbed out from their pandemic depths, with Japan's economy reporting its fastest quarterly growth on record.

China's industrial sector has staged an impressive turnaround from the pandemic paralysis seen earlier this year, helped by resilient exports.

With the coronavirus largely under control in China, consumers are opening up their wallets again in a further boost to activity.

China's fourth-quarter economic growth will accelerate from the third quarter, NBS spokesman Fu Linghui said.

Consumption prospects are improving, with the services industry showing good recovery momentum, he added.

Retail sales rose 4.3 per cent year on year, missing analysts' forecasts for 4.9 per cent growth but faster than the 3.3 per cent increase in September.

China's auto industry reported a robust 12.5 per cent growth in last month's vehicle sales, thanks to surging demand for electric cars and trucks. Domestic tourism also saw a strong rebound over the Golden Week holiday last month, although levels were still well short of last year's.

Fixed-asset investment rose 1.8 per cent between January and last month from the same period last year, compared with the 1.6 per cent growth forecast and a 0.8 per cent increase in the first nine months of the year.

Property investment was a key driver of broader spending, with last month's real estate investment up 12.7 per cent from a year ago, the fastest pace since July 2018 and quickening from September's 12 per cent, according to Reuters calculations based on NBS data.

Property sales by floor area rose a solid 15.3 per cent, the highest in more than three years, while new construction starts expanded 3.5 per cent, improving from last month's fall of 1.9 per cent.

However, government efforts to prevent bubbles in the property sector are gaining traction, with Chinese new home prices growing at a slower monthly pace last month amid restrictions imposed in some big cities.

Private sector fixed-asset investment, which accounts for 60 per cent of total investment, fell 0.7 per cent between January and last month, compared with a 1.5 per cent decline in the first nine months of the year.

AGENCE FRANCE-PRESSE, REUTERS