China’s economy picks up in October

Chinas economy continued to strengthen throughout October.

Per data released by the stats bureau (NBS) on Friday:

• Industrial value-added (IVA) grew 5.3% y/y, compared to 5.4% the previous month
• Fixed asset investment (FAI) grew 3.4% y/y, the same as September’s growth
• Retail sales of goods grew 4.8%, up from 3.2% the previous month
• Retail sales of services grew 5.5%, up from 5.2% in September

This is a great print.

• Retail sales of goods grew at their fastest rate in eight months.
• Infrastructure investment surged 8.1% y/y, the fastest rate in seven months.
• High-tech manufacturing grew by close to double digits.

But the biggest news: The real estate decline slowed considerably.

• Home sales by value only fell 0.2% y/y, compared to a 16.5% drop the month before.
• Developer funding, inventories, and completed floor space all improved from the previous month.

That said, the property decline is far from over.

• Real estate investment collapsed 12.3% y/y, the fastest decline this year.
• New construction starts also fell at the fastest rate this year – meaning real estate activity will continue to drag on the economy in the coming months.

Get smart: The October econ print shows further consolidation of the economy, building on September’s improvement.

• If consumption continues to grow, and the real estate decline continues to slow, the economy could soon be out of its funk.
• That would be great news for businesses and investors.