China: Investment grows at the slowest pace in nearly twenty years in April
May 15, 2018
China’s urban fixed asset investment expanded 7.0% annually in the first four months of the year, marking the softest expansion since December 1999. The result was down from the 7.5% increase registered in the first quarter and fell short of market expectations of a 7.4% rise. Notably softer investment growth could suggest an economic slowdown may be underway.
Fixed asset investment growth moderated in most sectors in the first four months of the year. Growth in the primary and tertiary sectors scaled back in the January–April period. Investment in the real estate sector eased from its over three-year high, indicating the housing market cycle is likely over its peak. Conversely, investment in the secondary sector gathered momentum in the four-month period.
From an ownership perspective, investment growth in fixed assets of private companies softened in April from an over two-year high in March, and investment by state-owned firms continued a downward trend with a notable moderation.
A month-on-month comparison shows that investment in urban fixed assets rose a seasonally-adjusted 0.52% in April, broadly stable from March’s revised 0.53% rise (previously reported: +0.57% month-on-month).
China Fixed Investment Forecast
FocusEconomics Consensus Forecast participants expect fixed asset investment to grow 7.1% in 2018, which is unchanged from last month’s forecast. In 2019, the panel sees fixed asset investment growth at 7.0%.
Author: Lindsey Ice, Economist