China’s industrial output growth continues to slow hitting a 17-year low in May, while investment also weakened last month, as did the pace of activity in real estate.
A small rise in retail sales could not shake off the gloom brought about by the weak production and investment data which was made to look odd by a surge crude steel output to its second record monthly high in as many months of just above 89 million tonnes.
That was up around 5% from April’s record high of just over 85 million tonnes (big rise in itself in a ’normal’ economy, let alone one that seems to be sluggish). it was also a more substantial 10% rise on May 2018 when the economy was a bit more buoyant.
Car production set an unwanted record in May though – the biggest monthly drop on record – down 16.4% after April’s big 14.6% and the 11th consecutive monthly fall in a row. May’s slump was three times the size of March’s 5.2% fall.
While exports were up a bit more than analysts thought, imports were down 8.5% but not iron ore imports which rose in May but are still weaker over the first five months of 2019 than a year earlier. (See separate story on iron ore prices and steel).
Industrial output in China rose 5.0% in May from a year earlier, slower than April’s 5.4% and well under the market forecasts around 5.5%.
Fixed-asset investment outside Chinese rural households rose 5.6% in the January-May period from a year earlier. But this was lower than the 6.1% increase recorded in the January-April period. Market forecasts were for a 6.1% gain.
Real estate investment, a key economic growth driver, also showed signs of tiredness, rising at an annual rate of 11.2% in the first five months, slowing from 11.9% a year earlier.
Retail sales, however, recovered slightly from their multiyear lows in April. Retail sales in China climbed 8.6% in May from a year earlier, up from a 7.2% on-year gain in April, and topping market forecast for growth around 8.2%.
