Data released by China’s National Bureau of Statistics on Thursday point to a slowdown in a range of economic indicators for the month of May, with retail sales, fixed-asset investment and industrial output all falling short of estimates.
Retail sales grew at 8.5% year-on-year (y/y) in May, missing the Reuters poll estimate of 9.6% and dropping over a percentage point from April’s growth rate to sink to a 15-year low.
Growth in fixed-asset investment, a category that notably includes infrastructure spending, slowed to 6.1% y/y for the five months up to May from 7% in the first four months. This figure also failed to meet market forecasts of 7% and is the metric’s weakest reading since it began publication in 1998.
Government infrastructure investment on public transport and road networks grew at 9.4% y/y for the first five months of the year, slowing from 12.4% in the January-April period and marking the fifth continuous month of deceleration. It is likely that this reflects Beijing’s strict tightening of financing channels for local governments as part of its wider deleveraging drive.
Industrial output showed less of a slowdown, falling 0.1% short of Reuters’ 6.8% y/y estimate. This is in-line with May’s manufacturing PMIs and new orders data which remained steady amid robust external demand.
Many analysts have been anticipating a widespread slowdown in H2 of this year as Beijing’s attempts to rein in China’s systemic debt problem finally take its toll on the wider economy. The official state think tank the State Information Centre maintains a 6.7% growth forecast for Q2, a slight markdown from the 6.8% figure reported in the last three quarters.