China’s key industrial production growth accelerated to a five-month high last month, the government announced yesterday as a series of statistics gave positive pointers for the world’s second-largest economy.
Industrial production, which measures output at factories, workshops and mines, rose 9.7 percent year-on-year, well above analyst expectations of 9 percent in a survey by Dow Jones Newswires.
Authorities also announced steady expansion in retail sales and fixed asset investment, and a benign inflation figure of 2.7 percent, unchanged on last month.
Analysts said the figures pointed to a more stable outlook for China’s economy — seen as a key driver of global growth — after months of mounting pessimism.
Lu Ting (陸挺), a Hong Kong-based economist for Bank of America Merrill Lynch, said the “overall figures are actually very good, especially the industrial output figure.”
China’s GDP — seen as a key driver of global growth — expanded 7.8 percent last year, its slowest annual pace in 13 years. Growth slipped to 7.7 percent in the January-to-March period and slowed further to 7.5 percent in the second quarter, raising alarm bells among economists over possible further weakness.
However, after Friday’s figures Lu said: “The momentum, if maintained, would in fact make everyone’s estimation about the second half rather pessimistic, so we will likely see a round of GDP forecast upgrades soon.”
The output figures came on the heels of robust trade figures on Thursday. Exports and imports, which had contracted in June, rebounded last month, growing 5.1 percent and 10.9 percent year-on-year respectively, customs said.
Two-way trade rose 7.8 percent year-on-year, slightly lower than the government’s eight percent target for this year, but “showing a stabilizing and recovering trend,” customs said.
Last month’s output growth figure was higher than June’s 8.9 percent and marked the best performance since the 9.9 percent recorded for January and February, which were released together due to distortions related to Lunar New Year.
Separately, retail sales, a key indicator for consumer spending, rose 13.2 percent last month compared with the same month last year, the National Bureau of Statistics (NBS) said, only a marginal slowing from 13.3 percent in June.
Growth in fixed asset investment, a key measure of government spending on infrastructure, increased 20.1 percent during the first seven months of this year compared with the same period last year, the NBS said, unchanged on last month’s rate.
Yesterday, the NBS said inflation held steady at 2.7 percent year-on-year last month, a result seen as potentially giving the authorities some leeway to take measures to boost the economy, if needed.
The consumer price index (CPI) rise was marginally below market expectations of 2.8 percent, according to the Dow Jones survey. CPI has broadly eased since hitting 3.2 percent in February during the Lunar New Year holiday, although it rebounded in June to a four-month high.