On a year-to-date basis, output expanded 6.1%, slightly below expectations and easing from earlier momentum, suggesting some moderation in factory activity.
In contrast, retail sales disappointed, rising just 1.7% year-on-year, well below expectations of around 2.3–2.4% and down from 2.8% previously. The weakness underscores ongoing fragility in household demand, which remains a key constraint on China’s broader economic recovery.
Investment data also came in soft. Fixed-asset investment grew 1.7% year-to-date, missing expectations and slipping from 1.8% previously. Within that, private sector investment contracted 2.2%, highlighting subdued business confidence, while infrastructure investment remained a relative bright spot with 8.9% growth.
The property sector continues to act as a major drag. Real estate investment fell 11.2% year-on-year in the first quarter, with new construction starts plunging more than 20% and developer funding conditions remaining tight. While residential property sales showed some improvement, they remained sharply negative, down 18.5% year-to-date.
Labour market conditions also showed signs of softening, with the surveyed unemployment rate rising to 5.4%, above expectations.
Taken together, the data suggest China’s economy is entering a more challenging phase. Industrial activity is holding up for now, but weak consumption, falling private investment and a deep property downturn point to underlying fragility.
With the Iran war driving higher energy costs and weighing on global demand, the outlook for the coming quarters is increasingly uncertain, with risks skewed toward slower growth.
–
Mixed for markets: industrial strength supports near-term sentiment, but weak consumption and property risks reinforce expectations of policy support
