Core conclusion
In the first quarter of 2022, GDP increased by 4.8% year-on-year, slightly higher than our expectation of 4.6% and the previous value of 4%. In March, the industrial added value increased by 5% year-on-year, and the former value was 7.5%; In March, the total retail sales of social consumer goods were - 3.5% year-on-year, with the previous value of 6.7%; In the first quarter, the total investment in fixed assets increased by 9.3% year-on-year, with the previous value of 12.2%; In March, the unemployment rate in the national urban survey was 5.8%, compared with the previous value of 5.5%.
Under the influence of the epidemic, the performance of the three industries is differentiated, and the decline of the three industries is more obvious. In the first quarter of 2022, GDP increased by 4.8% year-on-year. Under the influence of the epidemic, the poor performance of consumption in March, coupled with the continued weakening of real estate demand, dragged down GDP growth. By industry, the impact of the epidemic on the tertiary industry, especially the service industry, is more obvious.
Industrial production has weakened and the capacity utilization rate is low. In March, the industrial added value increased by 6.5% year-on-year, 1 percentage point lower than the year-on-year growth from January to February. Industrial added value and industrial capacity utilization are at a low level in recent years. Since Shanghai is a large-scale sealing and control measure launched at the end of March, the impact on the supply chain of automobile and other related industries began to be more obvious in April. It is expected that the industrial added value may fall significantly month on month in April, and the probability of further decline in industrial capacity utilization is high.
Optional consumer goods such as automobiles, household appliances, furniture and catering were greatly impacted by the epidemic. In March, the total retail sales of social consumer goods were - 3.5% year-on-year, down 10.2 percentage points from the previous value. Among them, catering revenue decreased by 16.4%. Catering is highly dependent on offline channels. The impact of the epidemic has led to the closure of a large number of stores. In addition, poor logistics and distribution and the tendency to reduce gathering activities under the epidemic have led to a significant decline in catering revenue.
The growth rate of fixed investment is still high, indicating that steady growth is still in force, but the epidemic has limited the effect of some steady growth policies. In the first quarter, fixed asset investment increased by 9.3% year-on-year, down 2.9 percentage points from January to February, but it is still at a historically high level. Among them, the epidemic situation, policy strength and other factors led to a significant decline in real estate investment, a significant decline in manufacturing investment, and a slight recovery in infrastructure investment.
The unemployment rate has picked up for five consecutive months, and residents have insufficient confidence in future employment expectations. In March, the unemployment rate in the national urban survey was 5.8%, up 0.3 percentage points from the previous month, and has rebounded for five consecutive months. From the perspective of structure, the unemployment rates of 16-24 years old and 25-59 years old were 16.0% and 5.2% respectively in March, up 0.7% and 0.4% respectively compared with the previous values. The central bank questionnaire shows that residents have insufficient confidence in future income and employment expectations.
Economy and market: the bottom of the policy has surfaced. With the cooling of the epidemic and the implementation of the policy, Q2 will meet the bottom of the economy. After the meeting of the Finance Committee on March 16, the end of the policy has been gradually established. In the Symposium of economic situation experts and entrepreneurs on April 7, the overweight signal of steady growth was clearly released. However, the fist cannot be hit on cotton, and the implementation of the policy needs to wait for the epidemic to cool down. At present, Shanghai has entered the critical stage of social clearance. If the epidemic can be effectively controlled in the short term, it is expected that may June will be the bottom of the economy of the whole year. In the follow-up, it is expected to introduce more measures to stabilize growth around infrastructure, real estate and consumption. In addition, manufacturing investment driven by technological transformation is likely to become a new growth point to support steady economic development.
Risk tip: the spread of the epidemic in China exceeded expectations; The strength and effect of the steady growth policy were not as good as expected
