People walk along a shopping street in Beijing, on April 15.TINGSHU WANG/Reuters
China’s economic growth missed forecasts in the second quarter of the year, adding to worries over surging youth unemployment and a weak property sector and raising the likelihood the government will double down on support for the faltering post COVID-19 recovery.
The world’s second largest economy grew at a 6.3 per cent annual pace in the April-June quarter, much slower than the 7-per-cent plus growth analysts had forecast given the anemic pace of activity the year before.
Unemployment of youths aged 16 to 24 rose to a record 21.3 per cent in June, up from 20.8 per cent the month before.
Investment in property development, a vital driver of both industrial and consumer demand, sank 7.9 per cent in the first half of the year compared to a year earlier in a troubling sign of persisting weakness in an industry that slowed even before the pandemic as the government moved to rein in excessive borrowing.
Officials have acknowledged that the economy is facing stiff headwinds, but said they expected growth to still reach the ruling Communist Party’s official target for this year of about 5 per cent.
The government will adjust policies to stabilize growth, National Bureau of Statistics spokesman Fu Linghui said at a news conference Monday.
Quarterly growth, the usual measure for other major economies, was 0.8 per cent, according to government data released Monday, in line with expectations but down sharply from 2.2 per cent in January-June.
Analysts have been far less optimistic than the Chinese government about the outlook for the year, given weakening demand for Chinese exports in other major economies.
The numbers are a “worrying result,” said Moody’s Analytics economist Harry Murphy Cruise.
“China’s recovery is going from bad to worse,” he said. “After a sugar injection in the opening months of 2023, the pandemic hangover is plaguing China’s recovery.”
Government spending is likely to help key industries like real estate and construction, but won’t be a “silver bullet,” he said in a commentary.
The 6.3-per-cent growth in China’s gross domestic product from April to June outpaced a 4.5-per-cent expansion in the previous quarter.
The still robust growth is largely due to the economy growing just 0.4 per cent a year earlier in April-June of 2022 amid strict lockdowns in Shanghai and other cities during COVID-19 outbreaks.
Apart from more government spending, regulators may cut interest rates and take other measures to free up credit, Marcella Chow, global market strategist at J.P. Morgan Asset Management wrote in a report.
“The weak economic readings suggest an urgency in escalating policy support so as to stabilize expectations,” Ms. Chow said.
Earlier this year, growth was boosted as people flocked to shopping malls and restaurants after nearly three years of “zero-COVID” restrictions were removed in late 2022.
The government’s growth target of “around 5 per cent” was seen as a conservative goal. It can only be met if the economy maintains close to its current level of growth.
Data released earlier showed exports declined 12.4 per cent in June from a year earlier as global demand faltered after central banks in the United States and Europe raised interest rates to curb inflation.
Retail sales, an indicator of consumer demand, in June rose 3.1 per cent from the same period in 2022. That’s seen as a strong point, but not strong enough, analysts said.
Industrial output, which measures activity in the manufacturing, mining and utilities sectors, beat analyst’s expectations, rising by 4.4 per cent in June compared with the same month a year earlier.
China’s policy makers are not having to fight inflation, but may end up having to contend with its opposite, deflation, or falling prices due to weak demand. In recent months, the authorities have tried to spur lending and spending, with mixed success.
Fixed-asset investment – spending on factory equipment, construction and other infrastructure projects to drive growth – rose by a still tepid 3.8 per cent for the first half of 2023 compared to the same period of 2022.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
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