BEIJING (BLOOMBERG) - China's property sector shrank at a faster pace in the final three months of last year as the country's housing slump continued to take its toll on the economy.
Output in the real estate sector shrank 2.9 per cent in the fourth quarter after a 1.6 per cent contraction in the previous three months, the National Bureau of Statistics said Tuesday (Jan 18) in a supplemental report on gross domestic product (GDP). That was the first consecutive quarterly decline since 2008.
The construction sector also saw its output decline by 2.1 per cent during the same period. Those two sectors combined were 13.8 per cent of national output in 2021, according to Bloomberg calculations, lower than the 14.5 per cent in 2020.
Despite the authorities' efforts to ease some restrictions on real estate funding, China's property market slump persisted in December, with the downturn spanning developers' sales, investments, land purchasing and financing activities. Property investment in December shrank 14 per cent from a year earlier, according to Bloomberg calculations. For the full year, it grew 4.4 per cent.
China's economy in the fourth quarter grew at the weakest pace in more than a year, weighed down by the housing slump and weak consumer spending, data released on Monday showed. GDP expanded 4 per cent from a year earlier, down from 4.9 per cent in the previous quarter. Growth of industrial production quickened slightly in December, but retail sales slowed sharply.
The breakdown of the GDP data confirmed the weakness in consumption, which was hit by restrictions to control repeated coronavirus outbreaks throughout the year. Hotels and catering grew 4.7 per cent in the fourth quarter, slowing from a 5.7 per cent expansion previously.
China will quickly roll out policy measures to boost domestic demand, Mr Yuan Da, an official with the country's top economic planner, said on Tuesday.
China will also study targeted measures to bolster industrial production, Mr Yuan told a news conference.
Growth in the manufacturing sector remained solid, rising 3.1 per cent in the quarter from a year ago, reflecting the limited impact of virus restrictions on industrial production as well as strong global demand for Chinese goods. Value-added of manufacturing industry accounted for 27.4 per cent of GDP last year, up 1.1 percentage point compared to a year ago, Monday's data showed.