Goldman Sachs expects China's April industrial production and retail sales growth to edge up, but fixed asset investment to continue weakening

Overview

This report previews China's main April activity data, including industrial production, fixed asset investment, and retail sales. Goldman Sachs believes marginal improvement in manufacturing momentum will lift industrial production growth slightly, energy prices and holiday timing may support retail sales, but investment will remain weighed down by construction activity, financing, and weather factors.

Core views

The core view is 'slightly better production and consumption, weaker investment.' Industrial production is expected to grow 6.2% year on year, above 5.7% in March; monthly fixed asset investment growth is expected to slow to 1.1%, bringing year-to-date growth down to 1.5%; retail sales are expected to grow 2.0% year on year, slightly above March's 1.7%.

Analysis framework

The report uses a macro data preview approach, comparing the official release schedule, monthly year-on-year and seasonally adjusted annualized growth forecasts, market consensus, and prior readings, while incorporating exports, steel demand, automobile output, construction PMI, policy bank financing, weather, and changing consumption patterns to explain the forecasts.

Methodology notes

• Macro forecastActivity data preview

  Use industrial production, fixed asset investment, and retail sales to assess short-term economic momentum.

  The report focuses on April activity data due for release, separately assessing marginal changes in production, investment, and consumption, and comparing them with Bloomberg consensus and March prior readings.

• Consensus comparisonGS forecasts vs. consensus

  Place Goldman Sachs forecasts alongside market consensus and prior readings to identify expectation gaps.

  Goldman Sachs forecasts industrial production above consensus, retail sales broadly in line, and fixed asset investment below consensus, highlighting the key focus at the release as the strength of production and the degree of investment weakness.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• China macro assets

  Directly related

  Strengths

  Industrial production and retail sales growth are expected to improve slightly, showing that short-term activity data are not weakening across the board.

  Weaknesses

  Fixed asset investment continues to slow, reflecting drags from construction activity, financing, and weather factors.

  Comparison

  Goldman Sachs is slightly above consensus on industrial production, broadly in line on retail sales, and slightly below consensus on fixed asset investment.

  Risks

  If the investment slowdown is larger than expected, it could weaken confidence in the sustainability of the economic recovery.

• Industrial and manufacturing-related assets

  Positive correlation

  Strengths

  Stronger-than-expected exports, a smaller year-on-year decline in steel demand, and improved automobile output support an industrial production rebound.

  Weaknesses

  The report still mentions the broader backdrop of global energy supply shocks, and the degree of manufacturing improvement may be limited.

  Comparison

  The April industrial production forecast is 6.2%, above March's 5.7% and the Bloomberg consensus of 5.9%.

  Risks

  If external demand or the commodity chain weakens again, the improvement in industrial production may not be sustained.

• Consumption-related assets

  Moderately positive correlation

  Strengths

  Gasoline sales are supported by energy prices, and holiday promotion may pull some restaurant demand forward from May to April.

  Weaknesses

  Auto and appliance sales growth remains sluggish, indicating weaker effectiveness of consumer goods trade-in policies.

  Comparison

  The April retail sales forecast is 2.0%, slightly above March's 1.7% and close to the Bloomberg consensus of 1.9%.

  Risks

  If auto and appliance consumption remains weak, the retail improvement may mainly be driven by price and timing factors.

• Infrastructure, property chain, and basic materials

  Slightly negative correlation

  Strengths

  There is no clear strong support; some demand may still depend on policy financing and a recovery in construction activity.

  Weaknesses

  A weaker construction PMI, contraction in policy bank net financing, heavy rainfall in South China, and softening end-demand for basic materials all point to weaker investment.

  Comparison

  The forecast for year-to-date fixed asset investment growth is 1.5%, below March's 1.7% and the consensus of 1.7%.

  Risks

  Further weakness in construction, financing, or orders could drag on sectors linked to the investment chain.

Key data

• Forecast for year-on-year industrial production growth6.2%April forecast; March prior was 5.7%, and the Bloomberg consensus is 5.9%.
• Forecast for seasonally adjusted annualized industrial production growth4.6%April forecast; March was 5.1%.
• Forecast for year-to-date year-on-year fixed asset investment growth1.5%April forecast; March prior was 1.7%, and the Bloomberg consensus is 1.7%.
• Forecast for monthly year-on-year fixed asset investment growth1.1%April forecast; March monthly year-on-year growth was 1.6%.
• Forecast for year-on-year retail sales growth2.0%April forecast; March prior was 1.7%, and the Bloomberg consensus is 1.9%.
• Data release time2026-05-18 10:00 BJTThe report says China's April activity data is scheduled for release next Monday.

Impact & implications

If the data match the forecasts, they would show a diverging structure in China's April economic momentum: external demand and manufacturing-related indicators support industrial production, consumption improves slightly, but the investment chain remains under pressure. For markets, industrial production could deliver a modest positive surprise, while fixed asset investment could create a negative surprise.

Risks

• The improvement in industrial production may be driven by short-term factors such as exports and automobile output, and its persistence still needs to be validated.
• If fixed asset investment is weaker than expected, market concerns about domestic demand and the construction chain could intensify.
• Part of the retail sales improvement comes from energy prices and holiday timing, and may not represent a meaningful strengthening of underlying consumption momentum.
• Weak auto and appliance sales suggest the effectiveness of consumer goods trade-in policies may be fading.
• Weather factors such as heavy rainfall may disrupt outdoor construction and short-term investment data.

What to watch

• China's April industrial production, fixed asset investment, and retail sales data to be released at 10:00 BJT on 2026-05-18.
• Whether actual industrial production exceeds the market consensus of 5.9%.
• Whether year-to-date year-on-year fixed asset investment growth slows to or below 1.5%.
• The composition of retail sales, especially gasoline, restaurant, auto, and appliance subcategories.
• Whether the construction PMI, policy bank net financing, and end-demand for basic materials continue to weaken.