Growth in China’s industrial production and retail sales eased more-than-expected in May, official data revealed Wednesday.
According to the National Bureau of Statistics, industrial production grew 8.8 percent on a yearly basis in May, weaker than the economists’ forecast of 9 percent and April’s 9.8 percent increase.
Similarly, retail sales expanded 12.4 percent annually, which was slower than the expected increase of 13.6 percent. Sales had advanced more than 17 percent in April.
During January to May period, fixed asset investment increased 15.4 percent from the same period last year. Economists had forecast investment to climb 16.9 percent after gaining 19.9 percent increase in January to April.
The combined hit from Covid, chip shortages and weak auto sales hit investment, production and retail sales in May, Iris Pang, an ING economist, said. This will continue into June.
Looking ahead, the recovery in consumption may slow somewhat this month given the recent virus flareup in southern China, the country’s worst since January, Julian Evans-Pritchard and Sheana Yue, economists at Capital Economics, said.
Further ahead though, there is still scope for strong rises in consumption as the virus situation comes under control and the vaccination roll-out broadens, the economists added.
Nonetheless, the economists suspect that any bounce in consumption coming out of the pandemic will be more than offset by a further slowdown in investment and exports.
The surveyed unemployment rate dropped marginally to 5 percent in May from 5.1 percent in April.
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