Data published by the National Bureau of Statistics of China (NBS) showed that industrial production growth accelerated more than expected in November, recording the fastest pace since February 2022. However, the growth rate of retail sales was much lower than economists' expectations. Overall, the data pointed to a patchy recovery in the Chinese economy and signaled that the government still definitely needs to do more to stabilize the economy.
According to the report, industrial production increased by 6.6% per annum after an increase of 4.6% per annum in October. Economists had expected an increase of 5.6% per annum. Retail sales growth accelerated to 10.1% per annum from 7.6% per annum in October. Consensus estimates suggested an increase of 12.5% per annum. Meanwhile, from the beginning of the year (to November) fixed asset investment grew by 2.9% per annum, the same pace as in the prior period and compared with market forecasts of a 3.0% rise. The data also indicated that the urban unemployment rate remained unchanged in November at 5%.
China's post-Covid economic recovery has so far failed to meet expectations due to the ongoing crisis in the real estate sector, debt risks and chronic youth unemployment. A number of economic support measures have failed to sufficiently lift economic sentiment, prompting calls for Beijing to step up economic stimulus amid fears of a deepening economic downturn. However, there are some positive signs that indicate Beijing's focus on growth. Collectively, in the first 11 months, investments in infrastructure and manufacturing increased by 5.8% y/y and 6.3% y/y, respectively; retail sales increased by 7.2% y/y, while real estate development investment dropped 9.4% y/y.