Foodservice Equipment Reports

Meanwhile, Real GDP Growth Slows to 8.1% in China

Since we spent the past week in China at Hotelex Shanghai 2012 and visited U.S. manufacturers and operators (more on Hotelex in a later issue of FER Fortnightly), we thought a report on China’s economy might be useful.

Last Friday, the country’s National Bureau of Statistics released data on the growth of gross domestic product, inflation and other data for the first quarter. Real GDP rose 8.1% in the first quarter this year on an annualized basis, the slowest quarterly growth since the first quarter 2009. Growth was down from 8.9% in the fourth quarter ’11.

Consumer-price inflation, which has been a problem for the Chinese economy for some time, reached 3.6% in March, up from 3.2% in February, according to Dow Jones. Sheng Luiyan, a spokesman for the NBS, said “From a whole-year point of view, we still have many favorable conditions to keep prices stable, but we can’t be too relaxed over inflation,” according to Reuters. Analysts cited by Dow Jones and Reuters tended to agree, believing the easing of inflationary pressures gives the Chinese authorities room for more stimulative policies. A loosing in lending was reported, for example.

One thing the Chinese have been trying to do is to push their economy toward more consumer consumption. Those efforts appear to be paying off. Consumption accounted for 76% of GDP growth in the quarter, up from 51.6% in the first quarter last year, according to Dow Jones.

As for foodservice, the NBS reported retail sales rose 15.2% on an annual basis in March. Yum! Brands, McDonald’s and Starbucks all continue to report strong same-store sales growth in the country. The NPD Group has reported consistent double-digit traffic growth on a quarterly basis versus year prior for the past two years. Traffic grew more than 18% in the third quarter last year, the latest data released.

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