China’s industrial production gained momentum in May while growth in retail sales kept pace with the previous month, showing signs of stabilization in the world’s second-biggest economy.
Industrial output rose 6.1 last month from a year earlier, the statistics bureau said Thursday, accelerating from 5.9 percent in April and beating the median estimate of 6.0 percent in a Bloomberg survey. Retail sales added 10.1 percent in May, while fixed-asset investment excluding rural households climbed 11.4 percent in the first five months.
“A stabilization in production, or a modest acceleration, shows that the Chinese economic performance won’t be bad in the coming months,” said Li Wei, China economist for Commonwealth Bank of Australia in Sydney. “Both industrial production and consumer spending are likely to turn better in the second half of this year.”
The numbers broaden the view on the economy after inflation and trade data released earlier this week showing a sluggish domestic environment. Signs that the economy may be bottoming amid its weakest growth since the 2009 global recession could be enough to keep the People’s Bank of China on the sidelines as it waits to see the impact of interest-rate cuts and loosened fiscal policy.
The Shanghai Composite Index rose immediately after the data, before declining 0.3 percent as of 1:55 p.m. local time. The statistics bureau said after the release that demand is still weak and the base for the pickup in industrial output isn’t solid.
“The lack of funds and insufficient new projects are the key factors weighing on investment growth,” the bureau said in a statement.
Bloomberg’s monthly gross domestic product tracker, a weighted average of monthly economic indicators, rose to 6.55 percent year-on-year in May from 6.4 percent in April.