China Industrial Output, Retail Sales Growth Tops Expectations

China’s industrial output grew more than expected in August as companies ramped up production following the relaxation of pandemic-related restrictions and the pent-up demand boosted retail sales, official data showed Friday.

Industrial production growth accelerated to 4.2 percent from 3.8 percent in July, the National Bureau of Statistics said. Output was forecast to climb again by 3.8 percent.

Retail sales grew 5.4 percent from the last year, up from 2.7 percent in the previous month and economists’ forecast of 3.5 percent.

In August, the surveyed jobless rate fell marginally to 5.3 percent, while it was forecast to remain unchanged at 5.4 percent.

In January to August period, fixed asset investment advanced 5.8 percent from the last year after rising 5.7 percent in January to July. Economists had forecast an annual growth of 5.5 percent.

However, reflecting the worsening property crisis, property investment continued to decline during January to August. Property investment plunged 7.4 percent annually.

Although China’s economy held up slightly better than anticipated in August, momentum still weakened relative to July amid renewed virus disruptions and factory closures due to power shortages, Julian Evans-Pritchard, Capital Economics economist said.

The economist added that September is shaping up to be even worse. And while the current virus wave may have peaked, activity is set to remain weak over the coming months amid the deepening property downturn, softening exports and recurring COVID-19 disruptions.

ING Economist Robert Carnell said there were some more encouraging signs, suggesting that the lockdowns in August did not have such a big impact on activity. The main stand-out was retail sales but remains at risk from future lockdowns, he noted.

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