1Q26_ Quarterly Outlook Report_Final_EN - Flipbook - Page 80
T H E P LUMB LI N E | A RETU RN TO F I RS T PRI N CI PL ES
Disappointing retail sales growth underscores weak consumer demand
24%
18%
12%
6%
0%
-6%
-12%
2010
2013
2016
2019
2022
YoY retail sales growth - 3 mth moving avg.
2025
Avg. (2010-2019)
Source: National Bureau of Statistics, Bloomberg Finance LP, Scotia Wealth Management
The property market slump deepened amid looming default risks for state-backed developer
China Vanke Co. Property investment in the year-to-date declined by 15.9% year-over-year, about
a half percentage point worse than expectations. Residential property sales for the same period
fell 11.2% from a 9.4% contraction previously.
The property market remains under duress, weighing on broader sentiment
24%
80%
16%
60%
8%
40%
0%
20%
-8%
0%
-16%
-20%
-40%
-24%
2021
2024
Property investment (YTD YoY) - LHS
Residential property sales (YTD YoY) - RHS
Source: National Bureau of Statistics, Bloomberg Finance LP, Scotia Wealth Management
Fixed asset investment through November fell 2.6% compared to a year ago, the third straight
negative reading. This is unusual for the Chinese economy. Over the past 30 years, investment
has averaged a robust growth rate of 16.4%. Outside of the pandemic, this recent stretch marks
the only negative prints on record, putting investment on track to posting the first annual drop in
data going back to 1998.
79
