News Story

China’s Industrial Output Grows At Slowest Pace in 17 Years; Retail Sales Improve

- China’s industrial output grew at the slowest pace in 17 years for the first two months in 2019, while retail sales and fixed-asset investment came in marginally above estimates.

Industrial output rose 5.3% year on year in January and February, the National Bureau of Statistics (NBS) reported on Thursday, the lowest since 2002. Factory output growth had been expected to slow to 5.5% from December’s 5.7%.

Meanwhile, fixed-asset investment improved slightly compared to the same period in 2018. The growth was 6.1% in the January-February period, marginally higher than the expected 6%.

Retail sales growth in January-February came in at 8.2%, in line with growth in December and just above the 8.1% increase forecast.

The NBS combines January and February activity data due to the long Lunar New Year holidays early each year, when factories and businesses across the country shut down.

“The latest data should partially ease concerns about a sharp slowdown at the start of the year. But the near-term outlook still looks downbeat… Meanwhile, the lack of a hoped-for pick-up in infrastructure investment suggests that fiscal loosening is still struggling to gain much traction,” said Julia Evans-Pritchard, senior China economist for Capital Economics, in a Financial Times report.

“With credit growth yet to see a meaningful turnaround, we think economic growth will remain under pressure until at least the middle of this year,” he added.

Chinese stocks traded lower in morning trade on Thursday following the release of the data, with the Shanghai Composite and the SZSE Component down 1.1% and 1.8% respectively by 11:00 PM ET (03:00 GMT). Hong Kong’s Hang Seng Index also slipped 0.4%.

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