Output in the real estate industry contracted 2% in the first quarter from a year ago, China’s National Bureau of Statistics said in a report on Tuesday
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-19 outbreaks and lockdowns began to escalate.
Output in the real estate industry, a key economic contributor, contracted 2% in the first quarter from a year ago, China’s National Bureau of Statistics said in a report on Tuesday (April 19). It was the steepest drop among all sectors, according to the bureau’s detailed breakdown of economic activity from January to March.
The property sector’s performance was slightly better than the fourth quarter of 2021, when it decreased by 2.9%.
In March, new-home sales declined 29%, the biggest drop since the downturn began in July, according to official figures released on Monday. That’s adding to the pain felt by cash-strapped developers, and putting pressure on policymakers to shore up an economy that’s facing weakening consumer spending and the highest unemployment rate since the early months of the pandemic.
China’s economy grew 4.8% in the first quarter, data showed, a stronger-than-expected acceleration that doesn’t capture the full extent of the damage from recent lockdowns. The financial and trade hub of 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 Lunar New Year holiday and disruption from Covid-19 outbreaks, according to 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% last month, the sharpest decline since mid-2020.
Output in the hotel and catering industry dipped 0.3% in the first quarter from a year ago, making it the second-worst performing sector.