China’s activity growth likely to have persisted in May

Data released in May implies that China’s activity growth might have continued over the month. The April data released for China showed that the quick acceleration witnessed in March in almost all the aspects is not sustainable but that the Chinese economy is still on a trend of rebound or is stabilizing. According to the official PMI report, the nation’s manufacturing production grew in May. This points towards a modest sequential growth in industrial production and therefore a stable rate on a year-on-year basis.

Meanwhile, Chinese housing market rebound is likely to continue with its strong pace. Last month, house price inflation had strengthened further and is broad-based.

Construction PMI also continued to be strong. Infrastructure and property investment is expected to have stayed strong and countered certain decelerated in investment growth somewhere else, said Societe Generale in a research report. However, retail sales are expected to have dropped moderately due to weaker inflation and negative base effects, added Societe Generale.