BEIJING (Reuters) – China’s industrial output growth accelerated in August, while retail sales expanded for the first time this year, suggesting the economic recovery is gathering pace as demand starts to improve more broadly from the coronavirus crisis.
An annual decline in fixed-asset investment over January-August also moderated due to government stimulus efforts.
After the pandemic paralysed huge swathes of the economy, China’s recovery has been gaining momentum as pent-up demand, government stimulus and surprisingly resilient exports propel a rebound.
Industrial output growth quickened to 5.6% in August from a year earlier, data from the National Statistics Bureau showed on Tuesday. Analysts polled by Reuters had expected a 5.1% rise from 4.8% in July.
Retail sales also rose 0.5% on-year, snapping a seven-month downturn and beating analysts’ forecast for zero growth. It July, sales dropped 1.1%.
Consumer confidence has been picking up lately, from spending on automobiles and duty-free shopping.
Auto sales rose 11.8% in August from a year earlier while sales of telecoms products jumped 25.1% y/y, the data showed.
Fixed-asset investment fell 0.3% in January-August from the same period last year, compared with a forecast 0.4% slide and a 1.6% decline in the first seven months of the year.
Private sector fixed-asset investment, which accounts for 60% of total investment, fell 2.8% in January-August, compared with a 5.7% decline in the first seven months of the year.
Recent economic indicators ranging from trade to producer prices and factory activity all suggested a further pick up in the industrial sector, and the broader economy.
Government stimulus has been a powerful domestic driver, while momentum has also been supported by Beijing’s largely successful efforts to get the virus under control.
Data last week showed China’s August exports marking the strongest annual gain since March 2019, as more of its trading partners eased coronavirus lockdowns. Factory gate prices also fell at their slowest annual pace in five months last month.
(Reporting by Reporting by Gabriel Crossley, Colin Qian and Kevin Yao; Editing by Shri Navaratnam)
