China’s retail sales shrink far more than expected, while industrial production disappoints

Several “robot arms” work on the automated assembly line of final wheel hub at a production workshop in Anqing city, Anhui province, China, Dec 9, 2022.

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BEIJING — China reported economic data Thursday that missed expectations across the board during a month in which widespread Covid controls weighed on growth.

Retail sales fell by 5.9% in November from a year ago, the National Bureau of Statistics said.

That’s worse than expectations for a decline of 3.7%, according to analysts polled by Reuters, and a greater drop than the 0.5% year-on-year decline in October.

Industrial production grew by 2.2% in November from a year ago, missing Reuters’ forecast for a 3.6% increase. The reported pace was also slower than the 5% increase in October.

Fixed asset investment for the year through November slowed to 5.3% year-on-year growth, missing Reuters’ expectations for a 5.6% increase. The official print was also down from 5.8% growth in the first 10 months of the year.

In the last two weeks, China has significantly peeled back a host of Covid-related restrictions that had hampered domestic travel and business activity. Authorities have emphasized vaccinations for elderly people, and encouraged Covid patients to recover at home.

Anecdotally, at least in Beijing, a significant share of the population has since fallen sick, if not tested positive for Covid, amid below-freezing weather.

A day before the data release, China’s National Bureau of Statistics canceled its in-person press conference set for Thursday without explanation.

As China moves toward reopening, analysts expect a surge in infections will initially weigh on growth before the economy can rebound.

The country also faces headwinds from declining global demand.

In November, exports fell by a disappointing 8.7% from a year ago. Imports dropped by 10.6% as domestic demand remained sluggish.

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