Key points of the report:
From the overall perspective, the economy has generally improved. The industrial added value in March and the GDP growth in Q1 are higher than that at the end of last year.
From the perspective of production, the economy is indeed a vibrant scene:
1) the production of most resource products close to the upstream is accelerating, especially the output growth rate of raw coal has climbed to 15%, which is a new high in recent ten years;
2) this change is due to the loosening of dual carbon assessment, which makes the continuous recovery of production level of varieties (mainly coke and steel) whose output has fallen to a very low level.
Even if we are not so optimistic about economic demand, this retaliatory production does fill the GDP level in the short term:
1) the long-term of economy is determined by supply, the medium-term is determined by demand, and the short-term is determined by supply:
2) the logic is very simple: in GDP statistics, accounting is included in the process of self production and self purchase of enterprises, and the inventory production of enterprises will also be included in GDP;
3) after the relaxation of the dual carbon policy, regardless of the demand, the deregulation of output will make the enterprise enter a short inventory replenishment stage.
But the dividend on this output may be dying:
1) the output growth rate of most varieties has returned to the normal level, and only the output rate of cement and steel is low. However, if the real estate cannot start, the further recovery of steel and cement output is doubtful;
2) this means that retaliatory production has come to an end and output will return to the track of demand.
In fact, the biggest focus of demand is infrastructure, but the dividends of infrastructure may not last long:
1) among all forces, only infrastructure is starting, and the actual growth rate of infrastructure is rapidly approaching the hub in 2019 (before the epidemic);
2) however, the pull of infrastructure construction may not last long. In 2022q1, the issuance amount of local government special bonds has reached 40% of the annual target, which means that the subsequent issuance of local government special bonds will decrease by 40% year-on-year.
In addition to these, this year, there is another fluctuation factor of epidemic prevention and control:
1) epidemic prevention and control and the resulting economic losses are the new sunk costs this year. With the economic "seal off - unseal - seal off...", the economic fluctuation also increases significantly;
2) with the variation of virus, epidemic prevention may cause more and more severe economic fluctuations. The zeroing policy anchors the number of diseases rather than the severe rate of diseases. Therefore, with the increase of disease transmission efficiency caused by virus variation, the radius of economic fluctuations caused by zeroing may be larger and larger.
In this, the only thing that can give imagination is the real estate. If the real estate starts to bottom out and recover, the economy may enter a relatively continuous improvement trend. However, this round of real estate exceeds the empirical law, so it is difficult for us to infer the trend of real estate on the left.
Before the bottom of the real estate appears, we can temporarily think that the economic fundamentals will slowly decline in the state of high volatility. However, in March, April and may this year, the economy may build a small bottom pulse under the attack of a round of epidemic. Therefore, the economic state in April is likely to be recession, while the state in May may may may be repair.
Risk tip: monetary policy exceeded expectations and economic recovery exceeded expectations.
