China’s retail sales growth sharply misses estimates in November, deepening

China’s retail sales growth and industrial production missed estimates in November while investment declined more than expected, data from National Bureau of Statistics showed Monday, indicating consumption remains a major worry.

Retail sales rose 1.3% last month from a year earlier, sharply missing Reuters’ median forecast for a 2.8% growth, and slowing from 2.9% rise in the prior month.

Industrial production climbed 4.8% in November from a year ago, edging down from 4.9% in the prior month and missing expectations for a 5% jump.

Investment in fixed assets that includes property contracted 2.6% over the January through November period compared with a year earlier, sharper than the 2.3% drop estimated by economists.

That decline deepened from the 1.7% in the January to October period, and was the sharpest slump seen since the pandemic outbreak in 2020, according to data from Wind Information going back to 1992.

“The contraction of fixed asset investment and the drop of property prices in recent months have been transmitted to the consumer sentiment,” Zhiwei Zhang, president and chief economist at Pinpoint asset management, said in a note following the data, expecting more supportive fiscal and monetary stimulus measures in the first quarter next year.

Investment in real estate dropped 15.9% in the first 11 months this year, steeper than the 10.3% drop seen in the January to October period, as the property slump drags on.

In another sign that the sector downturn is still searching for a bottom, the declines in home prices across 70 major cities steepened in November. New home prices fell 1.2% in tier-1 cities including Beijing, Guangzhou and Shenzhen while resale home prices dropped 5.8% from a year earlier.

Economists at Golman Sachs in a preview last week pointed to the falling auto sales as a major drag on overall retail sales, coupled with the “negative distortion” effect from the earlier-than-usual start of the Singles-Day online shopping festival that pulled forward demand from November to October.

Data from China Automobile Dealers Association showed auto retail sales by volume in November declined for the first time in three years, dropping 8.1% from a year earlier to 2.23 million cars, as many local governments paused the trade-in subsidies.

Several online shopping sites extended their promotional period in a bid to jolt consumer spending, running from the first half of October through to Nov. 11, making it the longest Singles’ Day sales period ever. But still, sales performance disappointed as consumers tightened their purse strings, with gross merchandise volume growing just 12%, compared to 20% growth last year, according to data from Syntun.

Chinese policymakers have pledged further policy support to drive domestic demand and boost consumption and investment for next year.

China’s finance ministry said in a statement Saturday that it planned to issue ultra-long-term special government bonds next year to fund projects…