China Center Data Flash: Growth peaked in Q1 but is likely to remain steady for a while

Data Flash is a brief interpretive summary of China’s official monthly economic data release.

• Leading economic indicators including the official PMI and PPI, as well as The Conference Board LEI, all suggest that growth over the short term peaked in Q1. April data show growth moderation in Industrial Production (IP), Fixed Asset Investment (FAI), and retail sales.
• New loan growth looks to be shifting from household mortgages to long-term corporate loans. In addition, after several months of strong expansion, growth in shadow lending appears to have slowed sharply in April.
• Housing sales growth continued to moderate, and this growth is expected to decline further. Real estate development investment growth measured in nominal terms continued to climb in April, but construction growth measured in real terms decreased slightly.
• Although growth in April compared to March is lower across nearly all indicators (including IP, FAI, retail sales, and exports), growth rates in these indicators were either slightly higher or on par when compared to the same period last year. The risk-curbing policy environment we have discussed previously is driving this moderation by slowing credit creation.