Institutions predict a significant rebound in consumption in May, with the economy continuing to experience high prosperity
The National Bureau of Statistics will soon release the main macroeconomic data for May. Institutions predict that the supply and demand sides will continue to improve, and the economy will continue to be prosperous in May. Domestic and international demand supports industrial production, and the May Day holiday has significantly boosted offline consumption. Real estate investment remains resilient, infrastructure investment has steadily increased, and there is still room for improvement in manufacturing growth rate.
Li Chao, Chief Economist of Zheshang Securities, believes that the economy will continue to be relatively prosperous in May. On the supply side, industrial production is stable and reinforced; On the demand side, consumption is actively recovering, investment remains resilient, and exports maintain a high growth rate.
Industrial production was strong in May, "said Zhong Zhengsheng, Chief Economist of Ping An Securities. The PMI production index rebounded by 0.5 on a month on month basis in May, significantly exceeding the average of 0.1 on a month on month basis from 2017 to 2019. The PMI purchasing volume index increased from the previous value of 51.7 to 51.9, while the PMI raw material inventory index decreased significantly from the previous value of 48.3 to 47.7, indirectly reflecting the strong production activity of enterprises in May. It is expected that the year-on-year growth rate of industrial added value in May will be 8.9%.
"Infrastructure expansion rebounded, real estate remained resilient, and manufacturing continued to rebound. It is expected that the growth rate of fixed assets investment from January to May will be 16.2%." Dong Qi, the macro chief analyst of Guotai Jun'an Research Institute, said that the regulation of real estate financing is still tightening, and the demand side will cool down, but the short-term impact on real estate investment is limited. With the gradual issuance of local bonds, the growth rate of infrastructure still tends to rebound. In terms of manufacturing, external demand continues to be resilient, domestic demand continues to recover, and enterprise profits, capacity utilization rates, and business expectations are all at high levels. Manufacturing investment is expected to continue to recover in May.
In terms of exports, Wang Han, Chief Economist of Industrial Securities, pointed out that the overseas supply and demand gap may continue to support China's exports. At the same time, the recovery of the global industrial chain will temporarily increase the demand for China's intermediate input exports. The situation of China's strong exports may continue in the short term.
Institutions generally believe that the highlights in the consumer sector were prominent in May. It is expected that the zero growth rate of social enterprises in May will be 14.5% year-on-year, "said Zhang Yu, assistant director and chief macro analyst of Huachuang Securities Research Institute. He believes that the zero growth rate of social enterprises in May is likely to be better than that in October last year. From the perspective of tourism recovery, the number of May Day travelers has recovered to 103.2% of the same period in 2019, and tourism revenue has recovered to 77% of the same period in 2019. From the PMI index, the business activity index of retail, catering, cultural, sports and entertainment industries closely related to residents' consumption is higher than last month, and is in the high prosperity range of over 58.0%.
It is expected that the total retail sales of consumer goods in May will increase by 12.9% year-on-year, with a compound annual growth rate of 4.8% from 2019 to 2021, an increase of 0.5% from the previous value, and a slight improvement in social zero. On the one hand, the May Day holiday has released offline consumption vitality, and residents' consumption willingness has significantly rebounded; On the other hand, offline consumption scenarios are also constantly enriching, and cultural and entertainment consumption that was restricted during the epidemic is regaining vitality. Under the logic of simultaneous expansion of supply and demand, there is still room for recovery in future consumption.
Information source: Economic Reference Report
