Chinese industrial production, retail sales miss expectations
By Michele Maatouk
Date: Monday 15 Aug 2022
(Sharecast News) - China's industrial production and retail sales data for July missed expectations on Monday.
Figures released by the National Bureau of Statistics showed that retail sales rose 2.7% from July 2021, coming in well below analyst expectations of 4.9% growth and down from 3.1% in June.
Meanwhile industrial production was up 3.8% in July following a 3.9% jump in June and missing expectations for a 4.3% increase.
Fixed asset investment rose 5.7% from July a year ago following 6.1% in June and versus expectations for 6.2% growth.
Craig Botham, chief China+ economist at Pantheon Macroeconomics, said: "The slowdown in Chinese industrial production supports the narrative that stronger performances in May and June were primarily the result of a reopening rebound, and that with order backlogs now cleared, China's factories will increasingly run idle once more.
"We were taken particularly by surprise at the weakness of retail sales, where we had thought China should eke out one more month of modest monthly growth given the support for some big ticket purchases.
"A renewed surge of Covid cases and tightening of zero-Covid restrictions likely played a part, but we think weak underlying demand is the main problem."
Capital Economics said: "The PBOC is already responding to these headwinds by stepping up support - it cut its key policy rates this morning in a surprise move and we expect further easing moves over the coming months.
"But with credit growth proving less responsive to policy loosening than in the past, any additional support probably won't be sufficient to prevent further economic weakness."
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