China's property sector contracts for third straight quarter

CHINA'S property sector contracted for a third straight quarter, a sign that real estate was still dragging on the economy, even before the recent Covid outbreaks and lockdowns began to escalate.

Output in the real estate industry, a key economic contributor, contracted 2 per cent in the first quarter from a year ago, China's National Bureau of Statistics said in a report on Tuesday (Apr 19). It was the steepest drop among all sectors, showed the bureau's detailed breakdown of economic activity from January to March.

The property sector's performance was slightly better than Q4 2021, when it dipped 2.9 per cent.

In March, new-home sales declined 29 per cent, the biggest drop since the downturn began in July, showed official figures released on Monday. That is adding to the pain felt by cash-strapped developers, and putting pressure on policymakers to shore up an economy that is facing weakening consumer spending and the highest unemployment rate since the early months of the pandemic.

China's economy grew 4.8 per cent in Q1 2022, data showed, a stronger-than-expected acceleration that does not capture the full extent of the damage from recent lockdowns. The financial hub Shanghai began to restrict movement in March, but those curbs have stretched well into April.

Industrial output and investment held up from January to March despite the quiet Chinese New Year holiday and disruption from Covid outbreaks, showed Monday's data.

But the lockdowns began to weigh on consumer spending in March, as retail sales contracted for the first time since 2020. Catering revenue plunged 16.4 per cent last month, the sharpest decline since mid-2020.

The surveyed jobless rate climbed to 5.8 per cent, the highest since May 2020.

Output in the hotel and catering industry dipped 0.3 per cent in Q1 from a year ago, making it the second-worst performing sector. BLOOMBERG