Nomura Asia Insights: China - Activity Data Remained Weak in May
Summaries are public. PDF access requires an active membership; all members have the same access. Sign in
Nomura reports that China's economic activity remained subdued in May 2026, with major indicators falling short of market expectations. Industrial production grew 5.6% year-on-year, missing the 6.0% consensus, while fixed-asset investment expanded 4.2% year-to-date versus an expected 4.5%. Retail sales rose 3.8%, below the projected 4.2%, dragged down by a 2.0% decline in auto sales, although catering revenue gained 5.0%.
The property sector continued to deteriorate, with real estate investment falling 8.5%. Property sales measured by floor area dropped 12.0%, and new starts plunged 15.0%. External demand also softened, as export growth slowed to 4.0% against expectations of 5.0%, while imports unexpectedly contracted 2.0% compared to a forecast 1.0% growth.
On the labor front, the overall unemployment rate held steady at 5.2%, but youth unemployment climbed to 14.5%. Manufacturing and infrastructure investment provided some support, growing 6.0% and 5.5%, respectively. Nomura concludes that the momentum behind China's economic recovery remains insufficient, signaling the necessity for authorities to step up policy support to stabilize growth.