(Bloomberg) -- China’s property sector contracted for a third straight quarter, a sign that real estate was still dragging on the economy, even before the recent Covid outbreaks and lockdowns began to escalate. 

Output in the real-estate industry, a key economic contributor, contracted 2% in the first quarter from a year ago, China’s National Bureau of Statistics said in a report Tuesday. It was the steepest drop among all sectors, according to the bureau’s detailed breakdown of economic activity from January to March.

The property sector’s performance was slightly better than the fourth quarter of 2021, when it decreased by 2.9%. Construction grew 1.4% in the same period, a pickup from the 2.1% contraction in the final three months of 2021.

Output in the hotel and catering industry dipped 0.3% in the first quarter from a year ago, making it the second-worst performing sector. Rising Covid infections and the strict curbs to contain them began to dent consumer spending toward the end of the quarter.

China’s economy grew 4.8% in the first quarter, data released Monday showed, a stronger-than-expected acceleration that doesn’t capture the full extent of the damage from recent lockdowns. The financial and trade hub Shanghai began to restrict movement in March, but those curbs have stretched well into April. 

Industrial output and investment held up from January to March despite the quiet Lunar New Year holiday and disruption from Covid outbreaks, according to Monday’s data. But the lockdowns began to weigh on consumer spending in March, as retail sales contracted for the first time since 2020. Catering revenue plunged 16.4% last month, the sharpest decline since mid-2020. 

The surveyed jobless rate climbed to 5.8%, the highest since May 2020.

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