European Capital Goods: China: demand fragility revealed again

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European Capital Goods: China: demand fragility revealed again

Equity Research

European Capital Goods

19 May 2026

China: demand fragility revealed

again

April data showed moderation in key macro / end-market European Capital Goods

indicators including industrial, FAI, consumer spending, NEUTRAL

property and credit despite decent exports, sustainability of European Capital Goods

Timothy Lee, CFA

improvements remain in question. +44 (0)20 7773 6879

timothy.lee@barclays.com

Barclays, UK

Our view on China: China's April data moderated slightly again with slower domestic activities

including industrial, FAI, consumer spending, property and credit, partly offset by still-strong Vlad Sergievskii

exports. We thus continue to see limited evidence for a material recovery in industrial activity in +44 (0)20 7116 1117

vlad.sergievskii@barclays.comChina, and we continue to question the sustainability of some recent trends (e.g. automation

rebound in 1Q, faster 2nd-hand property sales since Mar).

George Featherstone, CFA

Key chart of the month: Overall industrial automation market in China grew 2.3% YoY in 1Q26, +44 (0)20 3555 8585

mainly driven by discrete (+6.6% YoY) while process remained subdued, thanks to accelerating george.featherstone@barclays.com

growth in certain high-tech end markets, price increases amid inflation and associated pre-buy Barclays, UK

effects amid price increases resulting in moderate increase in channel inventory, especially for Rajesh Patki

domestic brands. Demand momentum from tech-driven sectors could continue, meanwhile +44 (0)20 3555 5193

sustainability of support from pricing-related pre-buy is a question. rajesh.patki@barclays.com

FIGURE 1. China automation component market – quarterly YoY change

Madalena Azevedo

+44 (0)20 7773 3616