China's strong recovery shows signs of softening as costs surge

China’s strong economic momen­tum eased slightly in May, as surg­in­g raw material prices squeezed profits, businesses turned more cautious and property and car sales underper­formed. 

That’s the outlook of an aggregate index combining eight early indicators tracked by Bloomberg, which slipped from April but remained in expans­ionary territory, under­pinned by solid export demand.

Confidence among SMEs eased in May from the highest level since the Covid-19 outbreak in the previous month, according to a survey of more than 500 compa­nies by Standard Chartered.

The index measuring current performance weakened in the month, while a drop in the ‘expec­tations’ sub-index points to concerns on future demand and profit margins.