China’s industrial production, housing sector slow its recovery

China’s housing market continues to face challenges as the country aims to restore its economy to pre-pandemic levels. The latest industrial production data from China showed that industrial production growth slowed to 5.6% in May, down more than 1% from the previous month’s figure.

Seana Smith and Madison Mills of Yahoo Finance break down the details.

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This post was written by Angel Smith

Video transcript

Well, China’s housing market is still struggling to recover even after registering a stimulus with house prices falling at a faster pace than originally predicted.

Industrial production also slowed to 5.6%.

This is down from 6.7%.

Meanwhile, in April, industrial production largely kept the country’s growth on track, despite its economy slowing.

So again, some of the worrisome signs within this report really underscore what we’ve seen play out here in China, Mattie over the last couple of quarters, especially the last few months.

And that’s that bumpy recovery and now specifically, I think the most concerning data from China here that we got early this morning was the latest data that they have on the property sector.

Some of the weakness there and maybe what will ultimately be needed to support the economy, maybe in the longer term, is so critical, especially because the government has already pushed a lot of stimulus into the housing sector. the amount of 350 billion dollars.

This is clearly not helping to support the housing market, which is critical.

This is a market that has been in complete disarray for the past two years coming out of COVID, we keep talking about when will China be in its post-pandemic recovery mode?

The housing market is a very critical piece of this puzzle.

And that’s important because it’s also part of the big picture when we think about the demand for things like the iPhone coming out of the region for EVs, the Chinese economy is such a critical part of so many companies that we talk about every day to as the consumer there begins to be better.

It will be a tough read for some of those other names.

And as a final data point here, they still have a 5% growth target for consumers in China this year.

So I wouldn’t be surprised if we see more stimulus from PB OC in the housing market to get that 5% Yes, exactly.

And it’s also, it’s also important to note what we saw on the retail side of things because there are a lot of questions about how clearly we can trust some of this data coming out of China.

The story continues

But when you take a look at those retail sales numbers, retail spending at least aggregating them remains weak when you compare it to some of those past readings that we’ve gone on and historically speaking, but again, it shows for those mixed data that we are leaving China.

And then again, at the end of the day, what could this bumpy recovery mean for us investors as well.

And even more broadly talking about that global perspective.

Absolutely.