China’s industrial output fell to its lowest level on record in the first two months of this year and urban unemployment hit its highest rate ever in February, as the coronavirus brought the world’s second-largest economy to a standstill.
The official data — some of the worst official figures ever reported by China — suggest President Xi Jinping’s attempts to expedite an economic recovery in late February have not yet had the desired effect.
Industrial output tumbled by 13.5 per cent in the first two months of this year and the urban unemployment rate surged to 6.2 per cent in February, the bureau said on Monday.
The latest economic data also showed that China retail sales plummeted by 20.5 per cent year on year in January and February and fixed asset investment fell by 24.5 per cent, down from 5.4 per cent growth when the data were last reported.
The numbers were far below analysts’ expectations with many China experts expressing surprise that government officials were willing to report such devastating figures.
“The latest activity and spending data were much weaker than expected and point to a far deeper downturn than during the Global Financial Crisis,” Capital Economics said in a note on Monday.
Growth in services production fell 13 per cent in the first two months, according to official data. Coupled with the industrial production figure, the data suggests that China’s gross domestic product growth was -13 per cent during the first two months of the year, according to Capital Economics.
“The actual shock could be much bigger than those deeply negative January-February numbers suggest, because the lockdowns started only from 23 January,” said Nomura’s chief China economist Ting Lu.
Officials in Beijing attempted to put a positive spin on the numbers, saying the impact was temporary.
“The economic development in the first two months was affected by the outbreak of Covid-19,” said Mao Shengyong at the National Bureau of Statistics. “However, from a comprehensive perspective, the impact of the viral disease is short term, external and manageable.”
But the data bode poorly for the country’s economic outlook in 2020.
The coronavirus outbreak that started in the central Chinese city of Wuhan in December has led to a widespread lockdown of cities across the country. The movement of migrant workers looking to return to factories across the country has been hindered, resulting in a serious hit to urban unemployment.
The poor economic data comes as new cases of coronavirus in China have plummeted while the number of infections has soared across the rest of the world.
China initially suffered a supply shock, with its factories unable to operate. But many economists are now concerned the country could now face a plunge in demand as the rest of the world cuts imports.
“A V-shaped recovery seems unlikely as the virus is spreading everywhere, which will pose a downside bias for external demand for China,” said Zhou Hao, senior emerging markets economist at Commerzbank.
China’s central bank has taken some monetary policy measures to help stimulate the economy but analysts said policymakers would need to do more to stimulate the economy.
Other central banks, including the US Federal Reserve, have unleashed huge stimulus packages to cushion growth as the outbreak sweeps across the US and Europe.
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
