China’s factories and real estate sectors are dampening the rebound

STORY: China’s shaky economic recovery appears to have caused a few more shocks.

Monday’s data showed activity in factories.

Industrial production increased by 5.6% in May, which was less than a month earlier and below analysts’ forecasts.

Another obstacle was the persistently difficult real estate sector in the country.

Real estate investment fell by more than 10% compared to the previous year between January and May.

New home prices also fell for the eleventh month in a row and saw their steepest decline in almost a decade.

All this despite the government and central bank’s efforts to revive the sector, including support for affordable housing.

Real estate accounted for about a quarter of the country’s economy, but was undermined by legal regulations surrounding debt owed by developers.

Goldman Sachs estimates that China is currently saddled with nearly $2 trillion in unsold homes.

However, the data for May were clearer.

Retail sales increased 3.7% year over year, accelerating and exceeding forecasts.

The labor market also remained at least stable, with the unemployment rate unchanged.

Still, economists say the latest numbers will increase pressure on Beijing to accelerate economic growth.

Policymakers announced the creation of more jobs in large projects and announced steps to increase domestic demand.