China's housing market continues to face challenges as the country aims to bring its economy back to pre-pandemic levels. The latest industrial output data from China showed that industrial output growth slowed to 5.6% in May, a decline of over 1% from the previous month's figure.

Yahoo Finance's Seana Smith and Madison Mills break down the details.

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This post was written by Angel Smith

Video Transcript

Well, China is housing market still struggling to rebound even after record a stimulus with housing prices declining at a faster pace than initially anticipated.

Industrial output also slowing to 5.6%.

That's down from 6.7%.

In April meantime, industrial production has largely kept the country's growth on track despite its otherwise slowing economy.

So again, some concerning signs within this report really underscores what we have seen play out here in China, Mattie over the last several quarters the last several months specifically.

And and that is that bumpy recovery and now specifically, I think the most concerning data point out of China here that we did get early this morning was the latest data that they have on the property sector.

Some of the weakness there and maybe what ultimately is going to be needed in order to prop up the economy, maybe in the longer term, it's so critical, particularly because the government has already been pushing a lot of stimulus into the housing sector to the tune of $350 billion.

That is clearly not helping prop up the housing market which is critical.

This is a market that has been in complete disarray over the course of the last couple of years coming out of COVID, we keep talking about when is China going to be in its post pandemic recovery mode?

The housing market is a very critical part of that puzzle.

And this is important because it's also part of the overall picture when we think about demand for things like iphones coming out of the region for EVs the Chinese economy is such a critical part of so many of the companies that we talk about every single day until the consumer there starts to get on better footing.

It's going to be a tough read through to some of those other names.

And as a final data point here, they still have a 5% growth target for the consumers in China over the course of this year.

So I wouldn't be surprised if we see more stimulus from the PB OC into the housing market in order to get that 5% of Yeah, exactly.

And it's also, it's also important to point out what we saw on the retail side of things too because that there's lots of questions about how much obviously that we can trust some of this data coming out of China.

But when you take a look at those retail sales number, retail spending at least picking up it remains weak when you compare it to some of those past readings that we have gone on and historically speaking, but again, it does point to that mixed data that we are getting out of China.

And then again, ultimately, what that bumpy recovery could mean here to us investors as well.

E even just more broadly speaking about that global perspective.

Absolutely.