BEIJING (Oct 20): The output of China’s property industry has shrunk 1.6% year-on-year (y-o-y) to 7.1% in the third quarter of 2021, the first decline since the Covid-19 pandemic outbreak in the 1Q2020, reported Bloomberg.

According to a supplemental report on China’s gross domestic product (GDP) release on Oct 19, China’s construction industry output also declined by 1.8% y-o-y. The report showed that the sector had never contracted in data back to 1992.

Citing on the data, Bloomberg reported the combined sales of China's top 100 developers plummeted 36% year-on-year in September, and the slow government-funded infrastructure construction has also undercut the building sectors.

Moreover, the escalating debt crisis at China Evergrande Group and other developers has undermined consumers' confidence in buying homes and exacerbated the effect of tight curbs on property developers' financing and property sale restrictions to cap prices.

According to the report, China's economy slowed further in 3Q2021, weighed down by the housing slump and electricity shortages. Meanwhile, the country recorded an overall GDP of 4.9% in the same period, down from 7.9% in the previous quarter.

It is also worth noting that the report showed that growth of investment and industrial production was sluggish, while retail sales rebounded slightly. Production halts at factories across the country due to a power shortage is reflected in the slowdown of the manufacturing industry, which expanded by 4.6% in 3Q2021, down from 9.2% in the previous quarter.

The government was therefore warned of the downward pressure on the industrial economy, with an official saying growth in the current three-month period will be affected by comparisons with the strong expansion a year ago. This week's weak data prompted many economists to downgrade their growth forecasts for the rest of the year.

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