China Retail, Real Estate Slow More Sharply Than Overall Economy

(Bloomberg) -- The services sectors that account for the biggest chunk of China’s expansion slowed more sharply than the overall economy last quarter.

Growth in the retail and wholesale sectors slowed to 5.5 percent in the fourth quarter of 2018 from a year earlier, down from 7.2 percent at the end of 2017. Real-estate growth slid to 2 percent in the quarter, compared with the 5.9 percent pace a year earlier. Together, they make up almost a third of the services sector.

Those slowdowns are much sharper than the national economy -- which just edged slower to 6.4 percent from 6.5 percent. The services sector, which accounted for more than half of national output last year, suffered from deteriorating consumer confidence amid a crackdown on borrowing and the trade war with the U.S.

The output of technology services increased 29.1 percent in the fourth quarter from a year earlier, versus 32.8 percent in the previous three-month through September, according to the National Statistics Bureau on Tuesday.

China Retail, Real Estate Slow More Sharply Than Overall Economy

The technology sector was already showing signs of stress after years of growth, with hiring advertisements declining in the second half of last year. Output in the the leading technology hub of Shenzhen slowed to 7.5 percent last year, from 8.8 percent in 2017.

China already revised down the technology sector’s expansion for 2017 to 21.8 percent from 26 percent initially reported, and revised the overall GDP growth rate to 6.8 percent from 6.9 percent.

©2019 Bloomberg L.P.