China’s shaky economic recovery from the coronavirus pandemic is gaining strength as consumers return to shopping malls and auto dealerships while the United States and Europe endure painful contractions.
Growth in the world’s second-largest economy accelerated to 4.9 per cent over a year earlier in the three months ending in September, up from the previous quarter’s 3.2 per cent, official data showed Monday. Retail spending rebounded to above pre-virus levels for the first time and factory output rose, boosted by demand for exports of masks and other medical supplies.
Growth ‘still accelerating’
China is the only major economy that is expected to grow this year while activity in the United States, Europe and Japan shrinks.
The recovery is “broadening out and becoming less reliant” on government stimulus, Julian Evans-Pritchard of Capital Economics said in a report. He said growth is “still accelerating” heading into the present quarter.
Most Asian stock markets rose on the news of increased activity in China, the biggest trading partner for all of its neighbours. Japan’s Nikkei 225 index added 1.1 per cent while Hong Kong’s Hang Seng climbed 0.9 per cent. Markets in South Korea and Australia also rose.
China’s benchmark Shanghai Composite Index lost 0.7 per cent on expectations the relatively strong data will reduce the likelihood of additional stimulus that might boost share prices.
Warning on international economy
China, where the pandemic began in December, became the first major economy to return to growth after the ruling Communist Party declared the disease under control in March and began reopening factories, shops and offices.
The economy contracted by 6.8 per cent in the first quarter, its worst performance since at least the mid-1960s, before rebounding.
The economy “continued the steady recovery,” the National Bureau of Statistics said in a report. However, it warned, “the international environment is still complicated and severe.” It said China faces great pressure to prevent a resurgence of the virus.
A worker is seen on scaffoldings at a construction site of a residential compound in Beijing on Monday. (Tingshu Wang/Reuters)
Authorities have lifted curbs on travel and business but visitors to government and other public buildings still are checked for the virus’s telltale fever. Travellers arriving from abroad must be quarantined for two weeks.
Last week, more than 10 million people were tested for the virus in the eastern port of Qingdao after 12 cases were found there. That broke a two-month streak with no virus transmissions reported within China.
Industrial production rose 5.8 per cent over the same quarter last year, a marked improvement over the first half’s 1.3 per cent contraction. Chinese exporters are taking market share from foreign competitors that still are hampered by anti-virus controls.
Retail sales rose 0.9 per cent over a year earlier. That was up from a 7.2 per cent contraction in the first half as consumers, already anxious about a slowing economy and a tariff war with Washington, put off buying. Online commerce rose 15.3 per cent.
In a sign demand is accelerating, sales in September rose 3.3 per cent.
“China’s recovery in private consumption is gathering momentum,” said Stephen Innes of AxiCorp in a report.
Economists say China is likely to recover faster than other major economies due to the ruling party’s decision to impose the most intensive anti-disease measures in history. Those temporarily cut off most access to cities with a total of 60 million people.
The International Monetary Fund is forecasting China’s economic growth at 1.8 per cent this year while the U.S. economy is expected to shrink by 4.3 per cent. The IMF expects a 9.8 per cent contraction in France, 6 per cent in Germany and 5.3 per cent in Japan.
Private sector analysts say as much as 30 per cent of China’s urban workforce, or up to 130 million people, may have lost their jobs at least temporarily. They say as many as 25 million jobs might be lost for good this year.
CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.
It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.
The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.
Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.
TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.
The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 7, 2024.
BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.
The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.
On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.
“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.
“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”
Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.
BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.
The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.
BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.
It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.
The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”
Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.
This report by The Canadian Press was first published Nov. 7, 2024.
TORONTO – Canada Goose Holdings Inc. trimmed its financial guidance as it reported its second-quarter revenue fell compared with a year ago.
The luxury clothing company says revenue for the quarter ended Sept. 29 totalled $267.8 million, down from $281.1 million in the same quarter last year.
Net income attributable to shareholders amounted to $5.4 million or six cents per diluted share, up from $3.9 million or four cents per diluted share a year earlier.
On an adjusted basis, Canada Goose says it earned five cents per diluted share in its latest quarter compared with an adjusted profit of 16 cents per diluted share a year earlier.
In its outlook, Canada Goose says it now expects total revenue for its full financial year to show a low-single-digit percentage decrease to low-single-digit percentage increase compared with earlier guidance for a low-single-digit increase.
It also says it now expects its adjusted net income per diluted share to show a mid-single-digit percentage increase compared with earlier guidance for a percentage increase in the mid-teens.
This report by The Canadian Press was first published Nov. 7, 2024.
