Consumer confidence grows according to latest figures

The first three months of this year were the best in two years for Linda Zhang, 32, who returned to work after losing her job in the summer of 2022.

She is now an admin at a local tourism firm, finding the new vocation a fit for her in both length and intensity compared with her previous profession as an auto saleswoman, although her salary, at around 8,000 yuan (US$1.095), is a third of what it was.

"I bought myself clothes and cosmetics as a gift to start a new chapter of my life," Zhang said. The Xi'an native is also searching apartments on sale, hoping to buy a home for the family, especially for her 4-year-old son.

She has a strengthened confidence toward the future, something reflected in the latest economic data released by the Shanghai Bureau of Statistics.

The city's services sector, which covers consumption and various investment activities, reported a growth of 5.6 percent from a year earlier in the first quarter to become a major driver of the city's 5.1-percent increase in overall gross domestic product.

The sector also outperformed both manufacturing and agriculture, which grew 2.9 percent and 0.9 percent, respectively.

In terms of industries, the output of the software and info-tech services surged 13 percent between January and March, followed by the courier sector's jump of 10.9 percent and the financial services sector's 9 percent.

Optimistic views

"The better-than-expected performance is bolstered by more demand for consumption and investment," said Xu Guoxiang, a professor at the Shanghai University of Finance and Economics.

In the first three months, Shanghai beefed up efforts to stimulate demand by hosting a slew of high-profile events such as 2025 F1 Chinese Grand Prix in March, and distributed consumption coupons three times in three months to stimulate businesses in catering and entertainment.

Meanwhile, the city implemented new policies to improve the job market, fundamental to stabilize the economy, and expanded the coverage of trade-in programs to increase sales of household appliances and cars.

"People get concrete benefits and thus are more willing to spend," Xu said.

According to the university's quarterly Index of Consumer Sentiment, which gained 10.5 points from the previous quarter to 111.4 in the first three months, Shanghai consumers were more positive over future growth. A reading above 100 indicates optimism.

The sub-index measuring people's intention to buy a home increased 16.2 points quarter on quarter and the purchase of cars up 18.4 points, albeit both were still pointing at pessimism.

For durable goods such as refrigerators, washing machines and television sets, people showed a strong desire to buy, with its index at 128, a record high in two years.

"People have improved expectations toward the future, and they are more confident after being reassured by various supportive policies," Xu said.

However, Xu said caution is needed because of the dramatic changes taking place due to the tariff disputes initiated by the US.

"Shanghai should be prepared as the city's economy still hinges heavily upon external factors," Xu said "However, with the rise of local consumption willingness, we have nothing to fear."