China's April Retail Sales Rise 5.1%, Fall Short of Expectations

Retail Sales Growth Falls Short of Expectations
Industrial Production Surpasses Forecasts, but Retail Sector Remains Weak

Last month, China's retail sales grew by only 5.1% year-on-year, falling short of market expectations. Industrial production, on the other hand, increased by 6.1%, surpassing forecasts.

According to the National Bureau of Statistics of China on May 19, retail sales in April rose by 5.1% compared to the same period last year.

Construction site in Fuyang, Anhui Province, China. Photo by AFP

This figure is below the market expectation of 5.5%. Retail sales from January to April also increased by 4.0% year-on-year, which did not meet the market forecast of 4.2%.

In contrast, industrial production grew by 6.1% year-on-year, exceeding the expected 5.5%. However, this marks a slowdown compared to the 7.7% increase recorded in March.

Bloomberg reported that despite the resilience of the industrial sector, the weak retail sales in April highlight the need for strong policy support. The prolonged real estate crisis, deflationary pressures, and concerns over unemployment are all negatively affecting household sentiment.

Raymond Yeung, Chief Economist for China at ANZ, said, "The positive industrial production data only show one side of the economy. The April retail sales figures reveal that people are reluctant to spend. A recovery in consumption is still necessary to achieve a 5% growth rate."

Fixed-asset investment, which tracks changes in capital investment in factories, roads, power grids, and real estate excluding rural areas, increased by 4.0% year-on-year from January to April, falling short of the market expectation of 4.2%. Real estate development investment during the same period declined by 10.3% compared to the previous year, indicating that the real estate downturn is continuing.

Additionally, profits of companies with annual sales of at least 20 million yuan ("above-scale" enterprises) rose by 6.1% year-on-year in April.

The average national urban unemployment rate in April was 5.1%, down 0.1 percentage points from the previous month. The average national urban unemployment rate from January to April was 5.2%.

Despite various stimulus measures implemented by Chinese authorities to stabilize the real estate market, new home prices in April remained unchanged.

Bloomberg pointed out that the real estate market downturn remains a headache for policymakers, and that China is facing the additional burden of real estate issues as it navigates trade tensions with the United States. The report also noted that concerns over the real estate slump and the trade war could trigger layoffs in large-scale manufacturing and export sectors, keeping consumer sentiment unstable.

David Chiu, an analyst at Bloomberg Economics, said, "Thanks to the tariff truce and stimulus measures, we expect economic recovery momentum to pick up in May and June." However, he added, "Uncertainty remains an obstacle to household and corporate spending. Although U.S. tariffs have been lowered, once the advance shipping demand ends, the tariff level could still pose a significant burden on exports."

This content was produced with the assistance of AI translation services.