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China’s industrial profits sink in deepening slump

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Industrial profits fell 3.6 percent in January-November from a year earlier, government data shows.

Profits at China’s industrial firms contracted further in the January-November period when strict COVID-19-related restrictions disrupted factory activity and supply chains as the virus spread through key manufacturing hubs.

Industrial profits fell 3.6 percent in January-November from a year earlier to 7.7 trillion yuan ($1.11 trillion), according to data released by the National Bureau of Statistics (NBS) on Tuesday. That compares with a 3.0 percent drop for January-October.

The downbeat data reflects the toll that anti-virus curbs in many cities last month, including major manufacturing hubs Guangzhou and Zhengzhou, took on the world’s second-largest economy, adding to damage from a protracted property crisis and slowing exports.

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Last month, industrial output rose only 2.2 percent from a year earlier, missing expectations for a 3.6 percent gain in a Reuters news agency poll and slowing significantly from the 5.0 percent growth seen in October.

Despite Beijing ditching some of the world’s toughest anti-virus restrictions in early December — and on Monday announcing it would stop requiring inbound travellers to go into quarantine starting from January 8 — the economy is still expected to struggle over the next few months as much of the population becomes infected and unable to work while recovering.

Business confidence in China has fallen to its lowest level since January 2013, a survey showed last week, reflecting the effect of surging COVID cases on economic activity.

At this year’s closed-door Central Economic Work Conference, top leaders and policymakers pledged to step up policy adjustments to support the slowing economy. But with businesses having anticipated a global recession in 2023 and the effect of a surge in domestic COVID infections, analysts say it may take at least another quarter before things turn around.

China’s economic growth was just 3 percent in the first three quarters of this year and is expected to stay around that rate for the full year, one of its worst years in almost half a century.

Industrial profit data covers large firms with annual revenues above 20 million yuan ($2.87m) from their main operations.

The bureau has not reported standalone monthly figures since July.

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Economy

Canada's economy slowed down in November, but still eked out growth – CBC.ca

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Business

The Canadian economy grew by 0.1 per cent in November as higher interest rates began to slow spending toward the end of the year.

Service sector expanded even as goods producing industries contracted

Canada’s gross domestic product expanded by 0.1 per cent in November, Statistics Canada reported Tuesday. (Ben Nelms/CBC)

The Canadian economy grew by 0.1 per cent in November as higher interest rates began to slow spending toward the end of the year.

Statistics Canada’s preliminary estimate for December indicates the economy stayed flat, suggesting the economy grew at an annualized rate of 1.6 per cent in the fourth quarter.

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The economy grew at an annualized rate of 2.9 per cent in the third quarter.

In November, growth in real domestic product was driven by the public sector, transportation and warehousing and finance and insurance.

Meanwhile, construction, retail and accommodation and food services contracted.

Statistics Canada says economic growth for 2022 was an estimated 3.8 per cent.

ABOUT THE AUTHOR

Nojoud Al Mallees covers economics for The Canadian Press. She’s based in Ottawa.

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Economy

IMF Raises World Economic Outlook for the First Time in a Year – Bloomberg

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IMF Raises World Economic Outlook for the First Time in a Year  Bloomberg

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Canadian economy grew 0.1% in November, likely was unchanged in December – The Globe and Mail

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People shop for produce at the Granville Island Market, in Vancouver, on July 20, 2022.DARRYL DYCK/The Canadian Press

Canada’s economy expanded slightly in November, matching expectations, and likely stalled in December, data showed on Tuesday, broadly in line with the Bank of Canada’s expectations for the economy to flatline during the first half of this year.

November gross domestic product (GDP) rose 0.1 per cent in November, Statistics Canada said, and was likely flat in December, according to a preliminary estimate.

“The flash estimate for December suggested that there was little if any growth during the final month of the year. That aligns with our view that the economy is likely stalling,” said Royce Mendes, head of macro strategy at Desjardins.

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In December, gains in the retail, utilities, and public sectors were offset by decreases in sectors including wholesale, finance and insurance, Statscan said.

Annualized gross domestic product likely gained 1.6 per cent in the fourth quarter, above the Bank of Canada’s 1.3 per cent forecast. If the flash estimate proves correct, the economy expanded 3.8 per cent in 2022 from the previous year, above the central bank’s 3.6 per cent forecast.

“Today’s data show that the Canadian economy continues to cool, but not as yet shift into reverse, in the face of rising interest rates,” Andrew Grantham, senior economist at CIBC Capital Markets, said in a note.

The Canadian central bank has raised its key interest rate at a record pace of 425 basis points in 10 months to cool the economy and bring inflation down. After the latest rate hike last week, the Bank of Canada said it would likely hold off on further increases.

Last week, the central bank said the economy would stall and could tip into a mild recession during the first half of this year.

“The overriding message is that the economy is just managing to keep its head above water, which squarely fits with the Bank of Canada’s view,” said Doug Porter, chief economist at BMO Capital Markets.

Canada’s service-producing sector grew 0.2 per cent in November, buoyed by a third straight month of gains in transportation and warehousing. The goods-producing sector contracted 0.1 per cent in November, dragged down by declines in the construction and manufacturing industries.

The Canadian dollar was trading 0.2 per cent lower at 1.3405 to the greenback, or 74.60 U.S. cents, after clawing back some of its earlier decline.

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