BREAKING: China posts first rise in industrial output since virus outbreak

[tacobell fan]

China’s industrial output increased in April for the first time since the coronavirus outbreak, adding to early signs of a recovery that economists cautioned would be slow and challenging.

• Industrial output rose 3.9% from a year earlier, versus a median estimate of 1.5%, and reversing a drop of 1.1% in March, data showed Friday. Retail sales slid 7.5%, more than the projected 6% drop.
• Fixed-asset investment decreased 10.3% in the first four months, a smaller decline than the 16.1% drop in the January-March period. The surveyed urban jobless rate, which doesn’t include all of the workforce, rose to 6.0%, from March’s 5.9%.

 

 

Key Insights

• The industrial improvement signaled that government stimulus efforts are having some effect, although support remains modest compared with China’s global peers. The retail data underscore the caution with which the public is greeting measures to reopen the economy. The upcoming National People’s Congress that starts next week is expected to lay out an economic policy road map for the rest of the year.
• Hong Kong’s Hang Seng index fell 0.2% while the Shanghai Composite was flat, as investors digested the mixed data.
• The sustainability of the nascent recovery is challenged by downward pressures from home and aboard. Slumping external demand and rising unemployment, not fully reflected in the official data, is likely to be a drag on growth.
• Private sector investment continued to contract faster than that by the state, shrinking 13.3% in the first four months.
• In spite of the improvement, the Chinese economy “hasn’t returned to normal level,” Liu Aihua, a NBS spokeswoman said at the press conference. There are “pent-up demand effects” in the data improvement, she said.
• “The data is in line with the overall trend that supply is stronger than demand and the recovery is mainly driven by supply,” said Larry Hu, Chief China Economist at Macquarie Group Ltd. “Looking ahead, China’s economy will face strong headwinds in the next few months if demand remains weak. The 6% jobless rate understated the current situation.”

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• Private firms’ industrial output rose 7% in April, faster than other types of enterprises including SOEs and foreign companies, according to the statement
• In the month, restaurant and catering receipts slumped by 31.1% from a year earlier, after a 46.8% collapse in March. Communication appliances rose 12.2%
• “Policy makers will likely find the recovery progress acceptable for now, as reflected in the PBoC holding off MLF rate cuts today,” said Michelle Lam, Greater China economist at Societe Generale HK. “But the biggest uncertainty remains the extent and the duration of the external demand shock. The risks remain to the downside, pointing to more stimulus to be revealed in next week’s NPC.”

[Daaarling]

They do whatever for power

[nijamena]

tomorrow market will be up 1000 points because of this news 🤯

[SinNombr3]

33 minutes ago, nijamena said:

tomorrow market will be up 1000 points because of this news 🤯

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