China’s crude steel output edged up 1.8% to 70.5 million tonnes in May from a year ago, while electricity output was up 0.9% in a generally lacklustre production report for May.
Slowing investment and a dip in housing were prominent in the monthly report on production, investment and retail sales. In fact investment rose at the slowest rate since 2000.
Private investment grew by just on 45 in the five months to May, public investment by more than 22% as the government stimulus spending kicked in
In fact when you look at inflation and trade figures there’s every sign the pace of activity slowed in May and April in the Chinese economy from the surprising strength in March.
It was the second time this year that crude steel production was above 70 million tonnes this year, data from the National Bureau of Statistics showed yesterday.
The average daily crude steel output in the world’s top producer eased 1.7% to 2.27 million tonnes in May from April.
Total output for the first five months fell 1.4% to 329.95 million tonnes from the same period last year, data showed.
Steel production is expected to fall further in June amid slowing demand and China’s efforts to cut overcapacity.
Cement production rose 3% which is not very strong given the higher spending in property this year. Coal output dropped nearly 17% in May against the same month last year as thermal power plants cut output by more than 6% and hydropower use rose sharply. Power plants also chose to import more cheaper, better-quality coal, further denting demand for coal from uncompetitive domestic mines.
Growth in fixed urban asset investment fell to 9.6% year on year in May, down nearly a percentage point from the previous month’s 10.5% and substantially less than the market forecast of no change from April.
Retail sales rose at an annual rate of 10% in May for the period, down from 10.1% in April and just under the market forecast for no change.
Industrial value grew 6% from May 2015, unchanged from April’s annualised growth rate and just ahead of market forecasts of 5.9%.
The weaker than forecast May performance was the second in a row and follows the surprisingly strong figures reported for March and the first quarter. If anything Chinese economic activity has slowed a little from the first quarter.
Month-on-month, industrial production increased 0.45% in May from April, compared with an 0.47% rise the previous month. Retail sales increased 0.76% in May from April. In April, they grew 0.80% from the month before.
And China’s housing sales continued to rise in the first five months of the year, but a slower rate compared to the pace recorded earlier this year.
Housing sales rose 53.4% from a year earlier to 3.18 trillion yuan ($US482.5 billion) during the January-to-May period, according to data released by the National Bureau of Statistics on Monday. In the first four months of this year, housing sales jumped 61.4%.
In May alone, housing sales rose 32.9% on-year by value, slower than the 63.5% jump recorded in April.
Investment growth in China’s real-estate rose 7% to 3.46 trillion yuan in the first five months of the year, down from the 7.2% gain recorded in the first four months.
Construction starts across residential and commercial real estate grew 18.3% in the first five months of the year to 595.2 million square meters, slower than the 21.4% rise recorded in the first four months of 2016.
