China’s latest “data dump” has offered a mixed picture on the momentum in the Chinese economy in May, with stronger-than-expected retail sales and industrial output figure partially offset by a soft reading on fixed asset investment that was driven by a slowdown in property investment.
According to China’s National Bureau of Statistics (NBS), retail sales rose by 10.7% in the 12 months to May, unchanged from the pace reported in April but slightly above the 10.6% increase expected.
By component, the NBS said sales of garments, telecommunications, oil products, furniture and building materials all slowed from the levels reported in the year to April, offset by faster sales of autos, office supplies, home appliances, personal care, cosmetics and jewelry.
Like the headline retail sales figure, industrial output also beat, lifting 6.5% from a year earlier. That was also unchanged from April but above the 6.3% level forecast by economists.
Of note, the NBS said coal output grew by 12% from a year earlier to 297.8 million tonnes, the fastest growth reported in over two years.
Crude steel output also remained firm, lifting 1.8% year-on-year to 72.26 million tonnes, leaving it just below the record peak of 72.78 million tonnes struck a month earlier.
In the first five months of the year total steel output grew to 346.8 million tonnes, up 4.4% from the same period in 2016.
While industrial output and retail sales both topped expectations, the one fly in the ointment came from urban fixed asset investment, expanding by 8.6% in the first five months of the year compared to the same period in 2016.
That was a moderation on the 8.9% year-on-year expansion reported in the first four months of the year and missed forecasts for a smaller slowdown of 8.8%.
By sector, the NBS said investment by private firms grew by 6.8% from a year earlier, still around half the increase reported in public sector investment at 12.6%.
Private sector investment accounts for around 60% of total investment in China.
Property investment moderated from the levels reported in April, growing by 8.8% in the first five months of the year compared to the levels reported a year earlier. That was the weakest growth reported since November 2016.
According to calculations from Reuters, growth in new construction starts nearly halved from the levels reported in April, slowing to 5.2% from 10.1%.
Outside of new starts, the NBS said that the area of property sold grew 14.3% in the first five months of the year compared to the same period in 2016, down from 15.7% reported in April.
There has been little reaction to the latest trio of data releases, with China-sensitive assets such as the Australian dollar and Chinese commodity futures all trading around the same levels seen before the data hit.
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