Industrial production in China likely rose 5.0% year-on-year in May, but weak demand and housing downturn weigh on investment.
China’s industrial production growth likely rebounded to 5.0% year-on-year in May, up from 4.1% in April, driven by strong exports and high-tech manufacturing. However, softer domestic demand and a persistent housing downturn continued to pressure economic activity.
Fixed asset investment may have contracted by 2.0% year-on-year in the first five months of 2025, reflecting ongoing weakness in the property sector. Credit growth is also expected to slow further as demand remains subdued, despite stabilizing business sentiment from recent US-China engagements.
The official manufacturing PMI fell to 50.0 in May from 50.3 in April, missing consensus expectations. Both new orders and new export orders PMIs slipped into contraction, signaling weaker demand.