China: Industrial output posts quickest growth since December 2019 in August
Industrial output grew 5.6% compared to the same month of the previous year in August, which was above July’s 4.8% increase. The reading marked the best result since December 2019 and exceeded the 5.1% increase that market analysts had expected.
Looking at the details of the release, manufacturing output was steady in August, while energy output gained steam and the mining sector posted a healthy rebound.
On a monthly basis, factory output grew 1.0% in seasonally-adjusted terms in August, which matched July’s expansion. Meanwhile, the trend improved slightly, with the annual average growth of industrial production coming in at plus 1.6%, up from July’s 1.5% reading.
In light of recent developments, some panelists upgraded their view on the Chinese economy. Raymond Yeung, Greater China Chief Economist at ANZ, comments that:
“We have revised upward our forecast for China’s GDP growth to 2.1% (+0.3ppt) for 2020 on the back of a robust recovery in the services industry, thanks to news that China will have COVID-19 vaccines ready by year-end. In addition, the macro data suggest that GDP growth actually expanded 0.8% over the first eight months, or for two-thirds of the year.”