China's Factory Output and Retail Sales Slow, Falling Short of Expectations
BEIJING (Reuters) – China’s factory output and retail sales both rose more slowly than expected in July from a year ago, data showed on Monday, amid signs of increasing pressure on China’s economy as export growth cooled and new COVID-19 outbreaks disrupted business.
Industrial production in the world’s second largest economy increased 6.4% year-on-year in July, against expectations for 7.8% growth and after rising 8.3% in June.
China’s economy has rebounded to its pre-pandemic growth levels, but the expansion appears to be losing steam as businesses have grappled with higher costs and supply bottlenecks while new COVID-19 infections in July prompted some local authorities to lock down and temporarily suspend business operations.
Data earlier this month also showed export growth, which has been a key driver of China’s impressive rebound from the COVID-19 slump in early 2020, unexpectedly slowed last month.
Consumption remained weak with retail sales rising 8.5% year-on-year in July. Analysts had expected retail sales to increase 11.5% after a 12.1% uptick in June.
China has tightened social restrictions to fight its latest COVID-19 outbreak in several cities, hitting the services sector, especially travel and hospitality in the country.
Fixed asset investment grew 10.3% in January-July from the same period a year ago, compared with an 11.3% rise tipped by a Reuters poll and a 12.6% increase in January-June.
Private sector fixed-asset investment, which accounts for 60% of total investment, grew 13.4% in the first seven months of the year, compared with a 15.4% gain in January-June.
Property investment, a crucial growth driver of China’s recovery from COVID-19 disruptions, grew 12.7% in January-July, versus 15% rise in the first half of this year.
(Reporting by Kevin Yao, Liangping Gao and Gabriel Crossley; Editing by Ana Nicolaci da Costa)
