(Yicai Global) Nov. 16 -- China’s retail sales gained pace for the second straight month in October, boosted by the week-long National Day holiday, booming exports and supportive government policies. But real estate and fixed asset investment slowed.

The total retail sales of consumer goods jumped 4.9 percent last month from a year earlier, a rate 0.5 percentage point faster than the previous month, according to figures released by the National Bureau of Statistics yesterday. Online sales of physical goods climbed 5.2 percent, an increase in pace of 0.7 percentage point.

There is still a lot of room for consumption to increase further as the economy continues to recover, employment is expanding, incomes are on the rise and the social security system is improving, said NBS spokesperson Fu Linghu. However, the complicated and volatile international situation as well as continued outbreaks of Covid-19 are still hindering direct sales, he added.

The recovery in spending will be limited because the economy is likely to continue a weak recovery in the fourth quarter and the pandemic will remain the largest disturbance, said Wu Chaoming, chief economist at Chasing Securities. Rising commodity prices and the high costs of international logistics are squeezing the margins of micro, small and medium enterprises, and those in low-income brackets will have great difficulties earning more money.

Real estate and fixed asset investment slowed. Investment in the real estate sector grew 7.2 percent from January to October year on year, a rate 1.6 percentage point slower than from January to September, while fixed asset investment climbed 6.1 percent, 1.2 percentage point slower than in the first nine months.

As more special bonds are issued in the fourth quarter, infrastructure investment should increase by around 10 percent from a year earlier to CNY500 billion (USD78.32 billion), Citic Securities said.

Industrial firms of a designated size, with an annual turnover of more than CNY20 million (USD3.1 million), saw growth in industrial value-added climb 3.5 percent last month from the same period last year, much higher than the 3.27 percent forecast by a Yicai Global poll of chief economists, largely on the back of increased coal output.

Last month the government intervened to halt a surge in crude coal prices that was leading to a nationwide electricity shortage as power suppliers found themselves working at a loss and halted or reduced production. The government raised the cap on electricity tariffs for businesses and exhorted coal mines to hike output.

As a result, crude coal output jumped 4 percent in October year on year, compared with a 0.9 percent decline in September. Coal prices surged 9.2 percent compared with 2.9 percent in September and electricity prices increased 10.7 percent up from 8.9 percent.

Editor: Kim Taylor