China’s economy performed better than expected in October as retail sales climbed higher and energy shortages eased.
Chinese industrial output rose 3.5% in October from a year earlier, while retail sales growth accelerated to 4.9%, beating economists’ forecasts. Growth in fixed-asset investment eased to 6.1% in the first 10 months of the year, with tighter curbs on the real estate market continuing to weigh on the sector. The surveyed jobless rate was steady at 4.9%.
The better-than-expected numbers provides some relief after the Chinese economy’s momentum weakened in recent months on the back of energy shortages, Beijing’s reining in of the property market and widespread COVID-19 outbreaks.
However, the recovery remains uncertain, given the outsized contribution of real estate -- at 25% of gross domestic product when related industries are included -- and the disruption to travel and spending from the government’s stringent COVID-19 restrictions.
Electricity shortages, which had been a key constraint on industrial output in September, eased last month, with power supply climbing 11.1% in October from a year earlier.
The property slump continued to weigh on output, with production of construction-related commodities, such as steel and iron, contracting. Investment in new construction declined for a fourth month, dropping 7.7% from a year ago.
Most economists expect Beijing to stick with the property curbs, resulting in weaker growth into next year. GDP growth is expected to slow to 3.5% in the final quarter, reach 8% for the full year and weaken to 5.4% in 2022, according to a survey of economists by Bloomberg Markets.
