Retail sales in China fell by 0.6% in May, the first decline since 2022

Retail sales in China fell by 0.6 per cent year-on-year in May, marking the first decline since December 2022 and signalling the persistent weakness in domestic consumption. This was announced by the National Bureau of Statistics of China. The figure follows the slight 0.2% increase recorded in April and is below analysts’ expectations, who had forecast no change. The main factor weighing on the figures was the slowdown in discretionary spending and purchases of durable goods, with car sales plummeting by 16.1% compared with a year earlier.

Sales of household appliances and audio-visual equipment (-15.6%), building materials and furnishings (-13.6%), gold and silver jewellery (-8.9%), furniture (-8.7 per cent) and sports and leisure goods (-8.0 per cent). By contrast, sales of beverages (+6.1%), tobacco and spirits (+4.8%), traditional Chinese and Western medicines (+4.0%), clothing, footwear and textiles (+3.8%) and cosmetics (+2.5%) showed growth.

By sector, catering revenue rose by 0.6%, whilst retail sales of goods fell by 0.7%. Excluding the automotive sector, retail sales nevertheless rose by 1.1%. On a month-on-month basis, sales fell by 0.4%, following a 0.6% decline in April. In the first five months of 2026, retail sales rose by 1.4% overall, highlighting a recovery in consumption that remains fragile despite the support measures adopted by the Chinese authorities.

By contrast, China’s industrial production has grown beyond expectations, recording a year-on-year increase of +4.5% in May 2026, accelerating from +4.1% in April and exceeding market expectations of 4.3%. This is highlighted by data published by the National Bureau of Statistics of China. The result marks an improvement following the slowdown observed in April, when industrial activity expansion had reached its lowest level since July 2023. Growth was driven primarily by the manufacturing sector and sectors linked to energy production and distribution. Manufacturing recorded a 4.4% increase, up from 4.0% the previous month, whilst the production and supply of electricity, heat, gas and water rose by 7.6%, accelerating from 5.3% in April. Growth in the mining sector, however, was more subdued, falling to 2.3% from 3.8% in the previous month.

More specifically, 28 of the 41 main industrial sectors reported an expansion in activity. Among the best performers were the computer and communications equipment sectors (+17.0%), shipbuilding and railway construction (+7.4%), specialised equipment (+9.1%), general equipment (+6.7%) and the automotive sector (+8.3%). In the first five months of 2026, Chinese industrial production rose by a total of 5.4% compared with the same period the previous year. On a monthly basis, industrial output rose by 0.4%.