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Original title: Lange Research: Investment growth has accelerated significantly, demand for steel is generally strong
According to data released today by the National Statistics Office, in October, domestic investment demand and consumer demand continued to improve, external demand was strong, production increased steadily, economic activity increased, prices in overall remained stable and China’s economic operation continued to recover steadily.
Accelerated inversion to be the lunar point
With the general improvement on the demand side, a good positive feedback has been formed on the production side and industrial production has maintained a high boom. In October, the value added of industrial companies above the designated size increased 6.9% year-on-year in real terms, and the growth rate remained the same as in September. From January to October, the value added of industries above the designated size increased by 1.8% year-on-year.
Investment momentum remained strong. From January to October, the national investment in fixed assets (excluding rural households) was 4.839.2 billion yuan, a year-on-year increase of 1.8%, an acceleration of 1.0 percentage point from January to September. According to estimates by the Lange Steel Research Center, the growth rate of investment in fixed assets in a single month increased from 8.7% last month to 12.2%.
The recovery in consumption is continuing. In October, total retail sales of consumer goods were 3,857.6 billion yuan, an increase of 4.3% year-on-year, and the growth rate accelerated by one percentage point. Among them, the growth rate of auto retail sales remained relatively high and the growth rate of home appliance retail sales turned from negative to positive. From January to October, total retail sales of consumer goods fell 5.9% year-on-year.
The growth rate of exports reached a new record. In October, the total value of the country’s exports (in dollars) increased by 11.4% year-on-year. Among them, the export of superior traditional products such as home appliances and electromechanical products continued to improve.
Real estate investment is better than expected, investment in infrastructure accelerates
From the perspective of the three main investment areas, real estate investment was better than expected. From January to October, the national investment in real estate development was 11.1655.6 billion yuan, an increase of 6.3% year-on-year, an acceleration of 0.7%. The monthly investment growth rate increased from 11.9% in the previous month. It increased slightly to 12.2%, maintaining a high level; The use of fiscal funds was accelerated and investment in infrastructure accelerated. From January to October, investment in infrastructure increased 0.7% year-on-year, an increase of 0.5% from January to September, and the monthly growth rate accelerated. The pick-up in demand and the expansion of production have made investment in manufacturing continue to recover. From January to October, investment in manufacturing fell 5.3% and the rate of decline decreased by 1.2 percentage points.
Manufacturing output remained high and manufacturing value added in October increased 7.5% year-on-year, down 0.1 percentage points. Among them, the main steel industry still maintained a high boom. In October, the added value of the metal products industry, general equipment manufacturing, machinery manufacturing and electrical equipment increased by 14.1%, 13.1% and 17.6%, respectively, above the rate general growth of the manufacturing industry. And it recovered from last month. Among related products, the production of metal cutting machine tools and industrial robots increased by 29.0% and 38.5% respectively, the production of generator sets increased by 86.0% and the production of automobiles increased by 11 ,1%.
The economy will continue to recover
Looking to the later stage, despite the worsening of foreign epidemics and the emergence of new cases of crowns in some parts of the country, China’s economy has a strong capacity for recovery and repair, along with a series of policy measures , and the general direction of the economic recovery remains unchanged.
From the perspective of leading investment indicators, total planned investment in start-up projects continued to accelerate year-on-year, with year-on-year growth of 14.9% in October, and the rebound in investment is expected to continue. The purchasing power of residents has increased, policies to promote consumption of automobiles and services have overlapped, and consumption will continue to recover steadily.
In October, the construction industry business activity index and the new orders index fell from the previous month, but were still in the expansion range and the prosperity of the construction industry remained high. Among them, the business activity index and the civil engineering construction industry new orders index increased from the previous month and remained at a relatively high level. With the launch of the funds and the start of project construction, the policy-driven effect will continue to appear and investment in infrastructure will continue to grow. strength.
In real estate, the strengthening of financing supervision has prompted real estate developers to increase their turnover, accelerate sales and the return of funds, and the improvement of income expectations has also increased the willingness of residents to buy households. In October, commercial home sales exceeded expectations, and the sales area increased 15.3% year-on-year, the growth rate reached a new record for the year. The growth rate of construction just started has returned to positive and real estate investment will remain resilient in the short term.
The manufacturing new orders index rose in October, and exports are expected to remain strong in the aftermath. National investment and consumer demand will continue to recover. The manufacturing new orders index is still in the expansion range, and the high boom in manufacturing production will continue.
Policy adjustment is expected to remain neutral
With the full recovery of the economy, the urgency to further stabilize policy growth has diminished. From a long-term perspective, the importance of adjusting the economic structure has increased. Current fiscal policy is in a phase of effective implementation and expansion tends to moderate, the inflationary trend is moderate, which will not restrict monetary policy, and short-term liquidity will remain reasonable.
The marginal tightening of monetary policy is the market consensus. It’s just a matter of time and pace. At the State Council’s policy briefing on November 6, Vice Governor Liu Guoqiang of the People’s Bank of China stated that the next policy step will remain moderately tight overall. The policies of the period cannot be long-term, and retirement will be sooner or later, but it must be evaluated based on the state of economic recovery and there should be no “policy cliff.”
Demand for steel is generally strong
Since November, under circumstances of high production and high inventory, the steel market as a whole has shown the characteristics of “weak expectations and strong reality.” Real estate investment has remained high, investment in infrastructure has accelerated, and the manufacturing boom has jointly fueled the rise in steel consumption. Expected performance.
In the short term, investment remains an important driving force for economic recovery. As commercial home sales pick up again and new construction resumes, demand for steel for real estate remains assured; investment in infrastructure continues to increase and demand for steel remains strong; manufacturing industry Production maintains a high boom and the strength of the steel used remains unchanged. Overall, the falling demand for steel is stable and strong, as the off-season approaches, the demand for steel may slowly decline. (Original article by Wang Jing of Lange Steel Research Center, please indicate source when reprinting)
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