China Industry September 2016


China: Growth in industrial production slows in September

October 19, 2016

In September, industrial production expanded 6.1% over the same month of last year, which was below August’s five-month high of 6.3%. The print failed to accelerate to the 6.4% increase that market analysts had expected. September’s reading reflected weaker growth in manufacturing production, which hit a seven-month low. In contrast, the mining subcomponent returned to growth in September, while electricity, gas and water supply activities expanded at a faster pace than in the previous month.

On a monthly basis, industrial production expanded 0.47% in seasonally-adjusted terms in September, which was below the 0.53% increase in August. After following an uninterrupted downward trajectory since late 2013, the trend now seems to be towards stabilization. Annual average growth in industrial production stabilized at August’s 6.0% in September.

September’s deceleration in industrial production was mainly driven by the closure of some factories around Hangzhou in order to reduce air pollution in the first week of September, due to the G20 meeting, and weak external demand.

For 2016, FocusEconomics Consensus Forecast panelists expect industrial production to grow 5.9%, which is unchanged from last month’s projection. In 2017, the panel sees industrial production growth falling to 5.5%, which is also unchanged from last month’s estimate.

Author: Ricard Torné, Lead Economist

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China Industry Chart

China Industry September 2016

Note: Year-on-year variation of industrial production index and annual average growth rate in %. Owing to seasonal factors related to the Lunar New Year, annual figures in January and February are reported together.
Source: National Bureau of Statistics of China (NBS) and FocusEconomics calculations.

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