Omicron virus is highly infectious. Since March this year, the epidemic in China has heated up rapidly. The unexpected spread of the epidemic has had an impact on all aspects of the economy and disrupted the rhythm of recent steady growth. In response to the high attention of the market to this round of epidemic, this paper quantitatively evaluates the specific impact of this round of epidemic on the economy. It mainly measures the impact of the epidemic on industrial production, construction and service industry.
The impact of this round of epidemic on the economy may be second only to the first quarter of 2020.
First, the number of confirmed cases is high. Second, the epidemic mainly occurred in the developed eastern coastal areas. Based on this, it is preliminarily judged that the negative impact of the epidemic on the economy in March this year exceeded the repeated periods of several rounds of epidemic in the second half of 2020 and January, July and August of 2021, and the depth of impact may be second only to the first quarter of 2020.
Considering that the impact of previous epidemics on different departments is different, and the relevant control measures in China are significantly more flexible than those in the first quarter of 2020, that is, important production activities will not stagnate due to the epidemic. It is preliminarily judged that the impact of this round of epidemic on various departments is as follows: Service Industry investment production. Up to now, the current round of epidemic has mainly spread in the developed eastern coastal areas. Therefore, the impact of the epidemic on different regions is ranked as: first tier cities second tier cities third tier cities.
Fortunately, the impact of the epidemic on industrial production is weak, which is verified by high-frequency data.
Setting up warehouses in the upstream will not affect the delivery of raw materials, especially if the factories in the upstream are far away from the city center. Therefore, compared with the service sector, industrial production is naturally the least sensitive to the epidemic. The experience of the past two years shows that the elasticity of the index of industrial growth relative to the epidemic is indeed weaker than the data of investment, social zero, core inflation and so on.
Recently, the daily consumption of power plants, apparent consumption of heat coils and other high-frequency indicators have declined by less than 5%, which is a normal slowdown, which does not reflect the obvious impact of the epidemic on industrial production.
We should also be vigilant about whether the changes of the epidemic in the future will have a further impact on industrial production, such as whether the epidemic in Tangshan will lead to a further decline in the operating rate of local steel mills.
Construction in the construction industry is obviously blocked, and the epidemic is expected to drag down the growth rate of investment by about 2-3 percentage points.
The rising epidemic is not conducive to investment expansion. On the one hand, the construction site may be shut down due to the epidemic, on the other hand, the poor logistics may lead to the passive decline of construction intensity.
Based on the experience in 2021, we found that under the two assumptions of loose and strict control, the investment in fixed assets will decrease by 1.8 percentage points and 3.3 percentage points respectively.
Micro data also have synchronous confirmation. The turnover of building materials and the apparent consumption of thread decreased, which verified that the construction intensity in China decreased year-on-year recently. In addition, the decline rate in East China and South China is higher than that in North China, which is consistent with the distribution of this round of epidemic.
In this round of epidemic, the service industry is the most affected, which is expected to affect the zero growth rate of social security by 1.8 ~ 3.5 percentage points. Referring to the relationship between the change of social zero and the epidemic situation in each province last year, and considering the differentiated prevention and control of each province, we believe that the drag of the epidemic on the growth rate of social zero in March this year is roughly 1.8 ~ 3.5 percentage points. Microscopically, the subway passenger volume has even been lower than the same period in 2020, while the congestion delay index is slightly higher than the same period in 2020. Structurally, the first tier cities are more affected than other cities.
The impact of the current round of epidemic on the steady growth policy.
This year's external environment is full of uncertainty. The recent epidemic has increased the pressure on China's economy, especially the service industry and consumption. Internal and external uncertainties resonate and capital market volatility increases. Whether to prevent financial risks or to ensure growth and people's livelihood, we need stronger steady growth policies. We expect that during the epidemic period, the monetary policy will be easy to loosen but difficult to tighten, the real estate policy will be strengthened, and the policies related to supporting small and medium-sized enterprises and stabilizing employment will be seen one after another.
Risk tip: the economic trend exceeds expectations; The epidemic development exceeded expectations; There may be errors in the calculation method.
