China: Investment growth moderates in Q1
China’s urban fixed asset investment expanded 7.5% annually in the January–March period, down from the 7.9% expansion registered in the first two months of the year. The figure just missed market expectations of a 7.6% increase.
Fixed asset investment growth eased in most sectors in the first three months of the year. Dynamics in the primary sector remained healthy but eased from the surge in the January–February period. Growth in the secondary sector softened in the same period, while the tertiary sector moderated as well. Conversely, investment growth in the closely watched real estate sector accelerated markedly to an over three-year high, increasing analysts’ view that the peak of the housing market cycle could be drawing closer.
From an ownership perspective, investment growth in fixed assets of private companies outpaced that of state-owned firms for the first time in nearly three years. Investment by state-owned firms continued a downward trend with a sizeable moderation, while investment among private companies grew at the fastest pace since December 2015.
A month-on-month comparison shows that investment in urban fixed assets rose a seasonally-adjusted 0.57% in March, broadly stable with February’s 0.58% rise.