China’s industrial production, which measures output at factories, workshops and mines in the world’s second-largest economy, gained 6.0 percent year-on-year in July, the government said Wednesday.
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“China July activity data came much weaker than we expected, indicating the growth momentum is losing steam again after a gentle rebound in Q2”, Nomura economist Zhao Yang said in a reaction note.
China’s exports dropped 0.9 percent from a year earlier in the first seven months, according to new customs data.
Spending on infrastructure was by comparison more modest, rising 17.8 percent on a yearly basis to 631 billion yuan.
Meanwhile, in the January-July period of this year, China’s overall value-added industrial output increased by 6.3 percent year on year.
Output of crude steel and cement often seen as proxies for the property investment sector, contracted 4.6 per cent and 4.7 per cent over a year ago, respectively, while electricity output contracted 2 per cent.
But progress has been slow for the PPP model because the authorities have not clearly explained the exit mechanism for private investment, and private investors are still waiting for more details, Zhang said Wednesday.
“There is no improvement in the data for the third quarter and economic growth is likely to slow further”, HSBC Holdings PLC economist Massachusetts Xiaoping said.
Retail sales held steady in July, as the growth rate was just 0.1 percentage point lower than a month ago.
Jiang Yuan, an analyst with the NBS, attributed the sharp slowdown in industrial output partly to declining exports.
Retail sales rose 10.5 per cent in July, while fixed-asset investment excluding rural households climbed 11.2 per cent in the first seven months.
The latest throughput and net import figures put China’s implied oil demand in the first seven months of 2015 at 10.39 mln bpd, up roughly 4.6 percent from the same period previous year.
The National Bureau of Statistics will provide a breakdown by refined products later this week.
Fixed asset investment, a measure of government spending on infrastructure, expanded 11.2% on-year in the January-July period, the NBS said – also below an 11.5% median estimate, and the lowest since December 2000.
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Preliminary implied demand for July 2014 was revised up from 9.57 million bpd based on reported and implied revisions to government data.
