China’s economy had another disappointing month in October as retail sales dropped for the first time in five months and industrial output increased below expectation. The result reflects weak demand at home and abroad.

Reuters cited official data from China’s National Bureau of Statistics (NBS) on Tuesday showing that the country’s industrial output was up 5.0% in October, compared with a 6.3% increase in September and below expectations of a 5.2% rise in a Reuters poll.

As an indicator of consumption, retail sales fell for the first time since May during Shanghai’s city-wide lockdown. Retail sales declined 0.5% compared with a 2.5% rise in September and missed the expectation of a 1.0% rise for the period.

Reuters also cited analysts’ note from Goldman Sachs, saying that “October activity growth broadly slowed and missed market expectations, pointing to a weak start to Q4 as a worsening COVID situation, prolonged property downturn, and slower export growth more than offset continued policy stimulus.” 

In addition, China’s property investment dropped 8.8% for the first ten months from a year earlier, further down from an 8.0% decline for the first nine months this year.

Property sales by floor area fell 22.3% for the January-October period from a year ago.

The country’s new construction by floor area plunged 37.8% in the first ten months compared with a 38% drop in the first nine months.

The services sector suffered from the COVID pandemic as restaurant income plunged 8.1%, sharply down from a 1.7% decline in September.

NBS spokesperson Fu Linghui said strict COVID-controlled measures put tremendous pressure on the Chinese economy.

Fu said, “The impact from the triple pressures on economic operations – shrinking demand, supply shocks, and weakening expectations – is growing.” 

Following the disappointing data, JPMorgan adjusted its GDP forecast for China’s growth in the fourth quarter to 2.7% from 3.4%, while Citi also revised it to 3.7% from 4.6%.According to a QUICK FactSet survey of private-sector analysts from Nikkei Asia, China’s 2022 growth forecast is 3.3%, hurting the global economy.

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