There was a broad-based slowdown in all the key indicators last month. This partly reflects disruptions to consumer activity due to the recent virus flare-up and flooding in central China. But investment spending and industrial activity, which are less sensitive to virus restrictions, also weakened markedly, suggesting that tighter credit conditions are biting. The drop back in consumption should reverse once the virus situation is brought under control and restrictions are lifted. But we think the slowdown elsewhere will deepen over the rest of the year.
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