Growth of China's industry electricity consumption slowed further in May as the world's second largest economy struggled recovering from sluggish expansion.

Industry electricity consumption rose 4.7% from a year earlier in May; the rate was almost three percentage points slower than a month ago, the National Energy Administration said.

Industry is responsible for 75% of total electricity consumption in China, which rose just over 5% year on year to 426.9 billion kilowatt hours in May.

Electricity consumption by the secondary sector was up 4.8% to 327.7 billion kilowatt hours. Industry represented more than 98% of that amount.

The slower growth came after electricity consumption by heavy industries rose 4.3% year on year in May. Electricity consumption by light industries was up 6.8% in the month.

The slack figures were in line with the slower growth of industrial output that grew 9.2% year on year in May, slightly slower than in April.

The figures also echoed with China's purchasing managers index that fell below the 50 critical point indicating a contraction in manufacturing compared with the previous month. The gauge compiled by HSBC dipped to 49.2 in May from 50.4 in April.

Nomura Securities analyst Zhang Zhiwei predicted that China's economic growth would fell below 7% in the second half of the year.

"Rising funding cost is set to discourage fixed-asset investment in the months to come," Zhang said. "However, the Chinese government is not likely to introduce more stimulus as it looks increasingly tolerant of low growth rates."

Unlike western economies that are largely charged by consumer spending, fixed-asset investment plays the central role fueling China's growth.

 

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