Industrial output growth remains buoyant in May

Latest reading: Industrial production grew 22.6% year on year in May (April: +23.7% yoy), well above market expectations, driven chiefly by booming manufacturing output as rising global AI demand and front-loading ahead of future U.S. tariffs boosted IT and electronics sales. On a seasonally adjusted monthly basis, factory output rose at a softer pace of 3.4% in May (April: +9.9% mom). Meanwhile, the trend improved sizably, with the annual average growth of industrial production coming in at 14.3% in May, up from April's 13.6%.

Panelist insight: Digging deeper into the data, Nomura analysts said: “The positive surprise in May can be attributed to very strong production growth in the computers & electronics industry, which surged to 89.3% y-o-y in May from 46.4% in April, driven by a ramp-up in server production, likely related to NVIDIA’s Blackwell GB200 series. Growth in production of electronic parts, including chips, remained solid at 34.5% y-o-y in May, though down from 39.3% in April. Outside of tech, production remained subdued, with basic metals, chemicals and autos industries all reporting negative growth, both on a year-on-year and sequential basis, as demand for steel and chemicals remained tepid, and as tariffs on auto parts contributed to a decline in sales.”

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