(Yicai) June 17 -- China’s retail sales rose for the first time in five months and by more than expected in May, boosted by holiday spending, mid-year sales, and the latest government-backed trade-in program.

Retail sales of consumer goods rose 3.7 percent from a year earlier to CNY3.92 trillion (USD540.4 billion) last month, figures from the National Bureau of Statistics showed today. That beat analyst forecasts for a 3 percent increase and was up on April’s 2.3 percent growth, which was a fifteen-month low.

The service sector, consumption, as well as imports and exports rebounded last month, driven by the ongoing release of economic policy effects, improved external demand, and the May Day holiday, Liu Aihua, chief economist at the NBS, said at a press briefing.

Unlike last year, the entire five days of the May Day holiday fell in the month this year, a key reason for the jump in sales from April, said Wang Qing, chief macro analyst at Golden Credit Rating International.

In the first five months of this year, retail sales moved up 4.1 percent year on year, Wang said, noting that this was still less than the two-year average before the Covid-19 pandemic as consumption stayed weak.

Industrial production rose 5.6 percent from a year ago, less than the 6 percent analysts expected and down from April’s 6.7 percent gain.

Manufacturing output slowed to 6 percent from 7 percent the month before, according to the NBS data. Output by equipment producers rose 7.5 percent, while that by high-tech manufacturers jumped 10 percent.

Industrial production maintained rapid growth, employment and commodity prices were stable, and transformation and upgrading continued to advance, the NBS’ Liu said.

Twenty-eight of China's 31 administrative regions logged production gains and 33 of the 41 major industries also did, Liu said.

From January through May, fixed-asset investment was CNY18.8 trillion (USD2.64 trillion), up 4 percent from a year ago, or a 8.6 percent boost when excluding real estate development.

Key sectors expanded slower as investment in infrastructure rose 5.7 percent in the first five months, down 0.3 percentage points from the first four months, investment in manufacturing widened by 9.6 percent, down 0.1 point, and investment in real estate development dropped 10.1 percent, falling quicker than the earlier 9.8 percent decline.

Editor: Emmi Laine