China’s factory output, retail sales slow, miss expectations

  • Industrial output +6.4% y/y vs June’s +8.3%, Reuters poll +7.8%
  • Retail sales +8.5% y/y vs June’s +12.1%, Reuters poll +11.5%
  • Fixed asset investment +10.3% in Jan-July, Reuters poll +11.3%

BEIJING, Aug 16 (Reuters) – China’s factory output and retail sales both rose more slowly than expected in July from a year ago, data showed on Monday, amid signs of increasing pressure on China’s economy as export growth cooled and new COVID-19 outbreaks disrupted business.

Industrial production in the world’s second largest economy increased 6.4% year-on-year in July, against expectations for 7.8% growth and after rising 8.3% in June.

China’s economy has rebounded to its pre-pandemic growth levels, but the expansion appears to be losing steam as businesses have grappled with higher costs and supply bottlenecks while new COVID-19 infections in July prompted some local authorities to lock down and temporarily suspend business operations. read more

Data earlier this month also showed export growth, which has been a key driver of China’s impressive rebound from the COVID-19 slump in early 2020, unexpectedly slowed last month. read more

Consumption remained weak with retail sales rising 8.5% year-on-year in July. Analysts had expected retail sales to increase 11.5% after a 12.1% uptick in June.

China has tightened social restrictions to fight its latest COVID-19 outbreak in several cities, hitting the services sector, especially travel and hospitality in the country. read more

Fixed asset investment grew 10.3% in January-July from the same period a year ago, compared with an 11.3% rise tipped by a Reuters poll and a 12.6% increase in January-June.

Private sector fixed-asset investment, which accounts for 60% of total investment, grew 13.4% in the first seven months of the year, compared with a 15.4% gain in January-June.

Property investment, a crucial growth driver of China’s recovery from COVID-19 disruptions, grew 12.7% in January-July, versus 15% rise in the first half of this year.

Reporting by Kevin Yao, Liangping Gao and Gabriel Crossley; Editing by Ana Nicolaci da Costa

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