China's formidable industrial output continues to recover from the ravages of the COVID-19 pandemic with this key growth indicator rising for the second straight month in July.
National industrial output in July rose 4.8% year-on-year, according to data from the National Bureau of Statistics (NBS) released Friday. On a month-on-month basis, industrial output inched forward 0.98%.On the other hand, the 4.8% growth was lower than the consensus 5.2% forecast in a Bloomberg poll of economists. The second straight monthly improvement in national output does to seem to confirm a sustained recovery from the massive economic damage inflicted by the virus.
Output by the manufacturing industry expanded 6% year-on-year. Industrial output by firms in the production and supply of electricity, thermal power, gas and water saw a year-on-year increase of 1.7%. On the other hand, the mining sector saw output slide by 2.6%.
The jump in July follows a similar 4.8% year-on-year increase in June. NBS said the June number was the strongest rise since December 2019 and was in line with the market expectations.
A sector-by-sector analysis shows a weaker manufacturing output in June; a stronger energy output and a boost in mining and quarrying production.
On a seasonally-adjusted monthly basis, industrial production rose 1.3% in June. On the other hand, the annual average growth in industrial production slid 1.5% from May's 1.6%.
When broken down by ownership, state-controlled firms did almost as well as privately owned enterprises in July. Output of state-controlled enterprises rose 4.1% year-on-year while that of the private sector improved by 4.2%.
Joint-stock companies saw a 4.2% rise in output while overseas-funded enterprises improved 7.6%.
Output of the high-tech sector surged 13% while the and equipment manufacturing sectors jumped 9.8%. NBS said the growth in both these sectors far exceeded the overall growth in industrial output.
The industrial output recovery in June and July, however, wasn't strong enough to lead to a similar recovery in the first seven months of the year. From January to July, industrial output tumbled 0.4% year-on-year. This was far better than the cumulative drop in industrial output from January to June, which was 9%.
NBS uses industrial output to measure the activity of designated large enterprises with an annual business turnover of at least $2.88 million (RMB20 million).
Retail sales of consumer goods, a major indicator of consumption growth, crawled upwards by 0.85% month-on-month in July. Fixed-asset investment from January to July lost 1.6% year-on-year, a much better result than the 3.1% decline from January to June.
Industrial production is projected to rise 1.6% in 2020, down 0.1% from the June forecast. For 2021, the panel sees industrial production growth at 7.1%, according to an estimate by FocusEconomics Consensus Forecast participants..
