European Capital Goods: China: May shows more deterioration

Research evidence excerpt

European Capital Goods: China: May shows more deterioration

Equity Research

European Capital Goods

18 June 2026

China: May shows more

deterioration

May data in China shows further slowdown in activity with European Capital Goods

softer PMI, consumer spending turning -ve and FAI declining NEUTRAL

further, while property/auto stayed weak. Exports remained European Capital Goods

Timothy Lee, CFA

the bright spot, but overall it is hard to see a meaningful +44 (0)20 7773 6879

recovery in sight. timothy.lee@barclays.com

Barclays, UK

Vlad Sergievskii

Our view on China: China's May data extended the weakness seen in April, with

+44 (0)20 7116 1117

broader economic indicators deteriorating, including PMI (sequential slower), consumer vlad.sergievskii@barclays.com

(turning -ve) and FAI (declining further). Larger end markets such as property and auto also Barclays, UK

stayed weak. Despite exports continuing to support growth, along with some individual

George Featherstone, CFA

industrial product performance, we see momentum continuing to be muted for industrial +44 (0)20 3555 8585

activities in China. george.featherstone@barclays.com

Key chart of the month: Total retail sales of consumer goods in China was down 0.6% YoY in

May 26, the first -ve growth since Dec 2022. The reduction in subsidies (e.g. trade-in subsidies for Rajesh Patki

+44 (0)20 3555 5193consumer goods, purchase tax subsidies for autos) has resulted in declining demand, while

rajesh.patki@barclays.com

weak expectations of jobs / property prices also limited purchasing activities.

FIGURE 1. Total retail sales of consumer goods in China Madalena Azevedo

+44 (0)20 7773 3616

(%)

madalena.amadogomesdeazevedo@barclays.c

35 om

30 Barclays, UK

25 May-26: -0.6% y/y

20 Vaspaan Yazdi Avari

15 +91 (0)22 6175 2382