If many fashion groups were able to post positive results due to improved sales numbers in the first quarter, it was mostly thanks to China’s results. But the music might change. China, starting in April, has started to feel the first effects of the trade war with the USA, with sales of fashion and clothing items decreasing for the first time since 2009. Exports have also suddenly gotten a lot smaller, due to weaker global demand. Total retail sales grew by 7.2% in April, in comparison to the previous time period in 2018, which is the slowest growth recorded since 2003, according to data from the National Bureau of Statistics (NBS). The forecast was +8.6%. According to analysts, Chinese people are starting to reduce their spending for daily consumer products (such as personal care and cosmetics), while eliminating expensive purchases such as automobiles. “the weak retail sales data are partially due to the deterioration of occupation numbers and the decreased entries among middle and low income individuals”, stated Nie Wen (economist at Hwabao Trust) to Reuters, firm who’s analysts had forecasted a +6.5% increase for industrial manufacturing in April and missed, since growth was only of 5.4%, equal to a steeper slowdown (+8.5% in March).
Alarms go off in Beijing: retail slows down in April as much as in 2003. What is happening?
