Boosted by holiday spending and trade-in policies, consumer spending is accelerating its recovery. The faster issuance of special bonds has spurred an uptick in infrastructure project initiations, leading to improved production and sales in the construction machinery sector and providing solid support from the investment side. The new export orders index has shown a significant rebound, indicating an improvement in external demand... Recently released macroeconomic data sends positive signals, pointing to a favorable start for China's economy in the first quarter.
Consumer spending continues to warm up. Data from Suning.com shows that from April 4th to 6th, store foot traffic nationwide increased by 62% compared to the previous period, with sales revenue rising by 33.5%. During the Qingming Festival holiday, strong travel demand drove sales of travel gear such as AI imaging phones, action cameras, and smart wristbands, all surging by over 50% compared to the previous period. Since the beginning of the year, the sustained recovery in consumption has been corroborated by various data points. Wang Daoshu, Deputy Director of the State Taxation Administration, stated that invoice data from January 1st to March 25th indicates sustained rapid growth in service consumption. Revenue from homestay services and residential services increased by 15.3% and 7.3% year-on-year, respectively. The extended Spring Festival holiday boosted the cultural and tourism markets, with active engagement in cultural tourism and recreational activities. Revenue for travel agencies and related services, as well as cultural, sports, and entertainment industries, grew by 14.3% and 14.1% year-on-year, respectively. "The vitality of service consumption is being unleashed, with the holiday economy demonstrating a significant pulling effect," Wang Daoshu noted.
The continued improvement in the service sector's prosperity level further confirms the positive trend of consumption recovery. Data released by the National Bureau of Statistics on March 31st shows that the Business Activity Index for the service sector was 50.2% in March, an increase of 0.5 percentage points from the previous month. The Services Business Activity Expectation Index stood at 54.8%, remaining at a relatively high level. "Driven by the extended Spring Festival holiday and trade-in policies, both total retail sales of consumer goods and service consumption showed a good rebound momentum in the first quarter," said Luo Zhiheng, Chief Economist and Dean of the Research Institute at Yuekai Securities. He added that entering the second quarter, the growth of consumption will depend more on the recovery of household income expectations and the sustainability of consumer willingness to spend.
Infrastructure investment is gaining strength. Excavators are considered essential equipment for infrastructure construction and serve as a barometer for observing the progress of infrastructure projects and fixed asset investment indicators. The latest excavator index reveals that in February, the national operating rate for port equipment reached 33.61%, a year-on-year increase of 3.91 percentage points, with the workload growth rate rising by 12.13% year-on-year. Despite the impact of the Spring Festival holiday, port equipment achieved year-on-year growth in both operating rates and workload. In February, seven categories of specialized equipment, including container handlers, pavers, and mixer trucks, saw year-on-year growth in their operating rates. According to statistics from the China Construction Machinery Association on major truck crane manufacturers, from January to February, a total of 3,090 truck cranes were sold, a year-on-year increase of 5.71%. Domestic sales accounted for 1,550 units, up 2.38% year-on-year, while exports reached 1,540 units, growing 9.3% year-on-year.
An analysis by Guotai Junan Securities research report suggests that driven by the accelerated issuance of special bonds, indicators related to infrastructure and construction starts have shown marginal improvement. Sun Binbin, Chief Economist at Caitong Securities, stated that on one hand, the issuance of new special bonds designated for construction projects has accelerated; on the other hand, major engineering projects are being implemented faster, leading to stronger infrastructure investment in March.
Regarding manufacturing investment, invoice data released by the State Taxation Administration shows that from January 1st to March 25th, corporate spending on purchasing mechanical and electrical equipment, which reflects enterprise equipment updates, increased by 8.4% year-on-year, maintaining a relatively fast growth trend. Specifically, procurement spending in the information technology services and scientific research & technical services sectors grew by 15.8% and 27.2% year-on-year, respectively, indicating strong momentum for equipment renewal. Wen Bin, Chief Economist at China Minsheng Bank, commented that overall, supported by profit recovery, equipment update policies, and the expansion of high-end manufacturing, manufacturing investment is expected to continue its slight upward trend.
Foreign trade demonstrates remarkable resilience. Leading indicators suggest a clear improvement in external demand. Data released by the National Bureau of Statistics shows that the New Export Orders Index within the Manufacturing Purchasing Managers' Index (PMI) for March was 49.1%, an increase of 4.1 percentage points from February. "Although geopolitical tensions are rising, they have not currently affected the fundamentals of exports," said Guo Lei, Chief Economist at GF Securities. Wang Qing, Chief Macro Analyst at Golden Credit Rating, noted that high-frequency data indicates global manufacturing has been in a state of continuous expansion recently, with overall external demand remaining relatively strong. Despite the impact of the shifting Spring Festival holiday timing, China's exports in March still had a significant positive effect on domestic manufacturing sentiment.
Shipping market data concurrently releases positive signals of strengthening external demand. According to data from the Shanghai Shipping Exchange, as of April 3rd, the China Containerized Freight Index stood at 1184.70 points, up 4.0% from the previous period (March 27th). The Shanghai Containerized Freight Index was 1854.96 points, an increase of 28.19 points compared to the previous period. Experts believe that the continuous improvement in China's economic prosperity level and the consolidation of the economic recovery trend provide solid support for the stable development of China's export container shipping market.
Looking ahead to the second quarter, Li Chao, Chief Economist at Zhejiang Securities, stated that thanks to China's industrial advantages in "new three" sectors (referring to new energy vehicles, lithium-ion batteries, and photovoltaic products), exports are expected to maintain a high growth trajectory.