China released statistics on Friday that suggested stronger industrial activity but weaker consumer growth.

April retail sales up 2.3% over the same month last year, according to the National Bureau of Statistics. That was less than the 3.1% rate recorded in March and less than the 3.8% gain predicted by a Reuters poll.

April’s industrial production increased 6.7% over the previous year, above forecasts of 5.5% growth. Additionally, there was a noticeable increase from 4.5% in March.

However, during the first four months of the year, fixed asset investment increased by 4.2% rather than the 4.6% predicted growth.

The pace of fall in real estate investment accelerated, with a 9.8% year-over-year loss in the first four months of 2024.

During that period, investments in manufacturing and infrastructure both somewhat decreased from the levels recorded as of March.

In April, the urban jobless rate was five percent. Prior to the release of the overall data, the bureau had stated that it would release the breakdown by age in the days that followed.

China’s Ministry of Commerce reports that over a recent vacation week from April 29 to May 3, retail sales increased by 6.8% year over year.

According to the government, during that period, retail sales of cars increased by 4.8%, driven mostly by national trade-in incentives, while those of home appliances increased by 7.9%.

“Prices, employment, exports, and industry major indicators all improved overall, with new driving forces maintain[ing] rapid growth,” the agency reported.

According to Bruce Pang of JLL, some customers will continue to exercise caution when making purchases because they are unsure about their future income and other factors.

However, he pointed out that rising service consumption and better job statistics suggested future improvements in retail sales.

The Labour Day vacation on May 1 and the high base from the previous year had an impact on the April numbers, according to a statement from the statistics agency.

Liu Aihua, a bureau spokesperson, drew attention to the fact that two days in April were included in the multi-day May 1 Labour Day vacation the previous year. The holiday didn’t start until May 1 this year.

According to her, the real estate industry is still undergoing transformation.

On Friday, China was also supposed to begin a six-month programme of issuing bonds with a 30-year maturity to finance key initiatives. According to Oxford Economics, the majority of any economic effects won’t be noticeable until the first half of 2019.

Liu noted the issuance of ultra-long bonds could also help boost market confidence.

Additional April statistics have shown conflicting results about growth.

April’s year-over-year growth in exports was 1.5%, as anticipated, but imports increased by 8.4%, far more than anticipated.

Last month’s little increase in consumer prices was another sign that domestic demand was beginning to stabilise.

However, a gauge of factory-level pricing kept going down. April’s new loan statistics fell to levels not seen in at least 20 years, partly as a result of adjustments made to data collection methods but also as a result of enterprises’ and consumers’ weak appetite for future borrowing.

Despite a protracted downturn, the real estate market is still mostly in the building stage for many pre-sold units. In an effort to increase sales, some communities have loosened limits on home purchases in recent weeks.

A news conference about strategies to facilitate the delivery of houses is set for Friday afternoon, with representatives from the housing ministry, central bank, and financial regulator.

In a late-month interview, Dan Wang, the chief economist of Hang Seng Bank (China), expressed her expectation that the Chinese real estate market will stabilise by the end of the next year.

“It appears that the policy was successful, albeit brutally, as it’s moving too quickly and has effectively put an end to speculation,” the speaker remarked.

She said that although the middle class has been particularly negatively impacted by the real estate crisis, the economy as a whole has held up.

“Putting data quality aside, it appears that manufacturing and industrial investment are able to offset a significant decline in the housing market,” Wang stated. “It has demonstrated some strength in the way China has implemented industrial policy and structured its economy.”

Compared to a year earlier, China’s official GDP increased by 5.3% in the first quarter, above estimates of a 4.6% gain. The goal for the nation’s GDP growth in 2024 is to be close to 5%.

Reporters were informed last week by the EU Chamber of Commerce in China that the current economic challenges seem to be cyclical and that it is more crucial for foreign enterprises to witness a rise in domestic demand than industrial investment.

China’s Ministry of Commerce reports that over a recent vacation week from April 29 to May 3, retail sales increased by 6.8% year over year.

According to the government, during that period, retail sales of cars increased by 4.8%, driven mostly by national trade-in incentives, while those of home appliances increased by 7.9%.

(Adapted from CNBC.com)