China’s retail-sales growth is slowing at the same time as factory output is falling, with global supply-chain bottlenecks and rising commodity prices blamed by economists.
According to data released today by the National Bureau of Statistics (NBS), retail sales grew by 17.7 per cent in April, a considerably slower rate than March’s 34.2-per-cent increase and well below the forecast 24.9 per cent.
Home-appliances sales growth dropped particularly sharply in April from the month before, falling from 38.9 per cent year-on-year growth in March to 6.1 per cent, according to NBS data.
Julian Evans-Pritchard, senior China economist at Capital Economics, said in a note that retail sales growth has fallen well below pre-pandemic pace.
“Looking ahead, we think the rebound in consumption should gather pace again in the coming months as the labour market continues to tighten,” he said.
Meanwhile, factory output – another key economic indicator – rose by 9.8 per cent, below March’s rise of 14.1 per cent, but in line with forecasts.
NBS spokesman Fu Linghui told Reuters that while China’s economy showed a steady improvement in April, new problems are also emerging, notably the rise in international commodity prices.
While China’s exporters are enjoying strong demand, global supply chain bottlenecks and rising raw materials costs have weighed on production, cooling the blistering economic recovery from last year’s Covid-19 slump.
Last week, China’s central bank warned that factory price inflation – which hit its highest pace since October 2017 last month – could rise further in the second and third quarters.
- Additional reporting by Reuters.