In the first quarter, China's GDP increased by 4.8% year-on-year, of which the added value of the primary industry increased by 6.0% year-on-year; The secondary industry increased by 5.8% year-on-year; The added value of the tertiary industry increased by 4.0% year-on-year. The impact of the epidemic and the disturbance of the geographical situation, the growth rate of the tertiary industry is weak, the primary and secondary industries are relatively disturbed, and the growth rate matches the overall situation. Due to the steady growth policy, the investment side infrastructure has made a significant contribution, and the high level of export still supports industrial production. However, affected by the epidemic in March, the total retail sales of social consumer goods were negative, and the consumer market was weak. In March, the growth rate of national fixed asset investment fell back to 9.3% (the previous value was 12.2%). The end force of infrastructure investment is obvious. In March, infrastructure investment increased by 10.48% year-on-year (the previous value is 8.61%), and the manufacturing industry maintained a high outlook.
In March, the prosperity of industrial production fell, but the resilience is still, and the decline of PMI is worthy of vigilance. In March, the industrial added value increased by 5% year-on-year. Although it fell significantly compared with February, it increased month on month, and is still in a reasonable range of about 5%, which is still relatively resilient. However, the manufacturing purchasing manager index was 49.5% in March, which is in the contraction range. It is worth being vigilant whether it implies a drop in demand. Structurally, the growth rate of black smelting in the upstream cycle industry rebounded slightly month on month, and the year-on-year growth of non-ferrous smelting rebounded sharply due to the impact of international bulk price increases. Core manufacturing industries such as special equipment still benefit from high exports and are less affected by upstream prices. The overall growth remains high, driving the continuous rapid growth of manufacturing industry in the middle reaches. Affected by the repeated epidemic, the growth rate of the downstream pharmaceutical manufacturing industry increased to 10.1% (the previous value was 8.6%), the lack of core and the impact of the supply chain superimposed the restart of the epidemic, the automobile manufacturing industry was negative, and the food manufacturing industry also fell sharply.
In March, the prosperity index of real estate development fell slightly, and the sub items of real estate investment continued to fall. Completion fell sharply, sales continued to cool and maintain negative growth, and new construction continued to weaken. The newly started area, construction area and completed area of real estate increased by - 17.5% (former value - 12.2%), 1% (former value 1.8%), 11.5% (former value - 9.8%), and the sales of commercial housing increased by - 22.7% (former value - 19.3%) year-on-year. On the financing side, although the qualification of sales financing in some regions (such as relaxing purchase restrictions in many places, reducing the proportion of first home loans, etc.) is slightly relaxed, the expected reversal needs more policy promotion. From the end of the policy to the expected improvement to the recovery of sales investment or facing a longer cycle, it is difficult to see more than expected repair before the middle of this year.
Looking back, the end of the policy has come out, but the end of the economy may depend on the middle of this year. Real estate investment declined in the medium and long term, and continued to be marginal loose in the short and medium term. Under the background of great downward pressure on the economy in the second quarter, there is more room for policy easing. The weakness of the sales side may continue until the middle of this year. The government's continuous efforts to ensure the delivery of housing and stabilize the house price or the cautious expectation of residents' house purchase has improved. The credit side is expected to continue to relax, but it needs the cooperation of financial institutions. The improvement of the investment side may be seen in the second half of this year. The affordable housing will be accelerated and started or the time point will be advanced.
Fiscal expenditure accelerated and infrastructure construction contributed significantly. Under the background of the continuous acceleration of fiscal expenditure, infrastructure investment hit the bottom at the end of last year and rebounded, and the investment still maintained a substantial growth in the first quarter of this year. In March, infrastructure investment (excluding power, heat, gas and water production and supply industries) increased by 10.48% year-on-year (the previous value was 8.61%). Since the negative turn to positive at the end of last year, it has increased significantly at the beginning of this year. In terms of breakdown, in March, the investment in water conservancy management increased by 10% (the former value was 22.5%), the investment in public facilities management increased by 8.1% (the former value was 4.3%), the investment in road transportation increased by 3.6% (the former value was 8.2%), and the investment in railway transportation increased by - 2.9 (the former value was - 8%).
The consumer market was weak in March. After the weak recovery of the consumer market at the beginning of the year, the epidemic has been disturbed again since mid March, and broad consumption has weakened. Under the background of better control of the epidemic at the beginning of the year and the impact of the Spring Festival, the consumer market recovered better than expected at the beginning of this year. However, in March, due to the impact of the epidemic, the consumption fell. The growth rate of total retail sales of social consumer goods was negative for the first time in nearly a year and a half, which was - 3.5% (the previous value was 6.7%), of which the required choice was relatively resilient and the optional choice fell sharply.
The required option is relatively resilient, and the optional option has a large drop. In terms of sub items, in March, due to the restrictions of the epidemic on the social environment, clothing, shoes, hats, knitwear and textiles fell sharply, and food and beverage rebounded slightly. In addition to cars, the retail sales of consumer goods were negative. Due to the weakness of the real estate market and the significant decline of completion, the consumption related to the post real estate cycle such as construction and decoration materials and furniture continued to weaken. In addition, the growth rate of optional consumption such as communication equipment decreased slightly, but still maintained a positive growth. With the superposition of the impact of core shortage and the restart of the epidemic, the growth rate of automobile consumption went negative again, reaching - 7.5% (the previous value was 3.9%). Affected by the epidemic, offline catering revenue fell sharply, and the growth rate of catering revenue in March was - 16.4% (the previous value was 8.9%).
Under the impact of the epidemic, the consumer market was depressed in March, and the consumption restriction may continue to April, which is difficult to repair than expected.
There are many consumption constraints. The main variables in March are the objective environment and employment level of epidemic prevention and control (the number of new urban employment in March was - 18.1% year-on-year, lower than 10.1% from January to February). As mentioned in our previous report, repeated outbreaks in the past have led to negative consumption year-on-year. It is expected that the epidemic will gradually stabilize and drive the offline catering consumption to pick up. Under the background of downward pressure on the economy, employment is under pressure, resulting in the slowdown of residents' income growth and the decline of consumption willingness. Considering the impact of the epidemic on low-income people, the Consumption Willingness of low-income residents depends more on income and income expectation. However, compared with the several shocks of the epidemic in 2020, the current residents' balance sheet is more vulnerable, and it is difficult to say "compensatory consumption" after the epidemic is controllable.
In March, China's exports to the world still maintained high growth under the high base. In terms of volume and price, price is the main factor. In March, the total import and export volume was 1478.9 billion US dollars (the previous value was 973.45 billion US dollars), of which the import volume was 228.7 billion US dollars, an increase of - 0.1%, and the export volume was 276.08 billion US dollars, a year-on-year increase of 14.7%, which still maintained a high growth under the high base. The export price index fell from 110.5 to 93.2 in March. Price was the main contribution, and the export price index continued to rise from 109.5 to 111.7 in March.
Risk tips: unexpected macroeconomic changes, intensity of demand recovery, secondary epidemic outbreak and vaccine progress, etc.
