Real Estate New Home Sales Dropped During Labor Day Holiday; Steel Output Below Year-Ago Levels

Overview

This report, published by Goldman Sachs Global Investment Research, details the weekly tracking of China’s high-frequency economic activities and policy updates (as of May 8, 2026). Its purpose is to evaluate recent economic performance through monitoring four categories of high-frequency metrics—consumption, production, other macro activities, and market policies—to assess the impact of energy supply shocks. Due to the May Day Labour Festival holidays, some data releases were delayed. Overall, there was a differentiation between cold primary real estate markets and hot secondary ones during the holidays. Industrial activity showed divergent trends with declining steel outputs though increasing coal consumption along coasts indicated recovery in electricity or specific heavy industries. On the policy front, multiple measures focused on stabilizing growth and supporting services were introduced.

Core views

In terms of consumption and travel: Real estate market behavior varied significantly during the May Day holiday. Average daily sales of newly built homes in 30 major cities decreased, with data from May 7th showing a year-on-year drop of 5.3%. In contrast, average daily transactions of existing homes in 16 key cities remained resilient, growing by 11.0% annually. Travel-related statistics also reflected a downturn, with domestic passenger flights falling short of last year’s levels, and a rise in flight cancellation rates exceeding those recorded in 2025 by 5.9 percentage points. Traffic congestion indices showed a slight decline from previous weeks. Despite fluctuations in travel numbers, per capita tourism revenue stayed roughly steady compared to the last May Golden Week, while consumer confidence index (Morning Consult) dipped slightly over the past week. Regarding production and investment: Industrial operations exhibited structural differences. Steel output declined, falling below the same period last year, whereas average daily coal consumption in coastal provinces rose above their respective figures from the prior year, signaling renewed demand for electricity or industrial usage. Fiscal efforts progressed slowly, with cumulative issuance of local government special-purpose bonds amounting to only 13.5 billion RMB so far this year. For other macroeconomic aspects and market conditions: Official port container throughput rose marginally last week, surpassing levels seen a year earlier; however, cargo tonnage shipped from 20 major ports dipped slightly below last year's total. Oil inventories stood at about 73 days' worth of demand. Domestic oil prices held steady last week, while Brent crude prices declined. Financial market liquidity remained ample, with interbank repo rates staying low; the exchange rate of RMB against USD oscillated within a narrow range, where the midpoint implied a positive countercyclical factor despite a minor decrease.

Analysis framework

The institution adopts a high-frequency data tracking methodology (High-Frequency Tracking), dissecting complex macroeconomic environments into dimensions such as consumption/travel, production/investment, other macro events, and market policies for weekly surveillance. This approach compensates for the latency and smoothing effects inherent in traditional monthly macro data releases (e.g., GDP, industrial value added), enabling investors to promptly capture marginal economic shifts. For instance, it utilizes near real-time signals like traffic congestion from Baidu Maps, flight cancellations, and port throughput to cross-validate actual economic heat. Coupled with a policy calendar, it analyzes temporal lags and correlations between policy implementations and observed changes in economic data.

Methodology notes

• Industry/Industrial Analysis FrameworkSupply-demand framework

  High-Frequency Supply-Demand Tracking

  By monitoring high-frequency indicators such as steel output (supply) and coal consumption (demand / degree of operational activity), alongside trade flows represented by port throughput, this method provides real-time insights into industrial sector供需平衡 states, eliminating reliance on lagging official monthly reports.

• Event Game Theory & Behavioral FinanceExpectation Difference / Expectation Management

  Policy Calendar Comparison with High-Frequency Data

  Contrasting recently implemented policies—such as special-purpose bonds, services sector support, and property market relaxations—with concurrent high-frequency economic data helps gauge whether these initiatives swiftly translate into tangible improvements in economic activity, thereby assessing both policy efficacy and investor expectation gaps.

• Quantitative/Factor/Portfolio TheoryOthers

  Nowcasting (Near-Term Forecasting) Techniques

  Leveraging high-frequency alternative datasets (like map-based congestion and flight patterns) to construct real-time models estimating current economic conditions addresses information vacuums caused by delays in official statistical disclosures.

Key data

• YoY Change in Average Daily New Home Sales Volume Across 30 Cities-5.3%Data from May 7th affected by the May Day holiday slowdown
• YoY Change in Average Daily Second-Hand Home Sales Volume Across 16 Cities+11.0%Data from May 7th exhibiting strength relative to new homes
• YoY Change in Domestic Flight Cancellation Rate+5.9%Exceeds the 2025同期水平 by 5.9 percentage points
• Total Issuance of Local Special-Purpose Bonds So Far This Year13.5 Billion YuanRMB, reflecting fiscal momentum
• Visible Imported Crude Oil Inventory73 DaysMaintained around 73 days of demand coverage
• Fiscal Support Allocated for Early Childhood Education by MOF45.8 Billion YuanAllocated in 2026, part of recent pro-growth policies

Impact & implications

The analysis suggests uneven recovery in China’s economy. Active secondary housing markets could help stabilize household balance sheets, yet weak primary markets continue to constrain upstream construction material demands. Declining steel production might relate to infrastructure project schedules, but increased coal consumption hints at expanding power needs or particular energy-intensive sectors. Policies ranging from educational funding to service industry supports and water network developments demonstrate simultaneous efforts on micro-level livelihoods and macro-level infrastructure to counter external uncertainties and foster internal circulation. For markets, stable interest rates and currency policies offer bottom support for asset prices, but comprehensive economic revival necessitates observing continued improvement in subsequent high-frequency data streams.

Risks

• External uncertainties disrupting economic stability
• Persistently sluggish new home sales dragging down related产业链
• Slower-than-anticipated implementation pace of fiscal policies

What to watch

• Post-May-Day holiday recovery in consumption data
• Acceleration in the issuance progress of local special-purpose bonds
• Convergence trend between steel production and coal consumption divergence
• Concrete impacts of upcoming policies targeting service industries and consumer goods recycling programs