Factory output growth slowest in years
By Richard Fu |
August 10, 2012, Friday
|
Print Edition
Print Edition
CHINA'S factory output posted its weakest growth in more than three years in July, raising expectations the government will take further stimulus measures to bolster the economy.
Industrial production grew 9.2 percent last month, the National Bureau of Statistics reported yesterday, the lowest since May 2009 when output rose 8.9 percent.
"The numbers suggest the production cycle is still in a decelerating phase," said Alaistair Chan, an economist at Moody's Analytics. "Further policy easing is probable, especially given anecdotal evidence of some manufacturers freezing hiring or putting in place forced holidays."
Electricity output rose 2.1 percent to 435.1 billion kilowatt hours in July from a year earlier after production was unchanged in June. Car output gained 12.1 percent to 862,000 units after rising 7.9 percent in June.
A slowing economy has forced manufacturers from steel mills to automakers to cut production or lower sales targets.
The central bank lowered interest rates in June and July, the first cuts since 2008, to help combat the slowdown.
JPMorgan economists said the impact of policy easing is expected to show up from this month on, as the July data appears to suggest a gradual bottoming out.
"The de-stocking pressure, which had dragged activity in the industrial sector in recent months, may be close to an end," JPMorgan said in a note yesterday.
The Purchasing Managers Index, a gauge of manufacturing activities, edged down to 50.1 in July from June's 50.2, official data showed earlier this month. The reading indicates the sector is still expanded, a sign of a stabilizing economy, according to some economists.
Meanwhile, the statistics bureau said fixed-asset investment in non-rural areas increased 20.4 percent in the first seven months from a year earlier, unchanged from the January-June period.
Fixed-asset investment in roads, bridges and real estate has been a key driver of economic expansion but the government is trying to reduce its contribution as it rebalances the growth pattern.
Industrial production grew 9.2 percent last month, the National Bureau of Statistics reported yesterday, the lowest since May 2009 when output rose 8.9 percent.
"The numbers suggest the production cycle is still in a decelerating phase," said Alaistair Chan, an economist at Moody's Analytics. "Further policy easing is probable, especially given anecdotal evidence of some manufacturers freezing hiring or putting in place forced holidays."
Electricity output rose 2.1 percent to 435.1 billion kilowatt hours in July from a year earlier after production was unchanged in June. Car output gained 12.1 percent to 862,000 units after rising 7.9 percent in June.
A slowing economy has forced manufacturers from steel mills to automakers to cut production or lower sales targets.
The central bank lowered interest rates in June and July, the first cuts since 2008, to help combat the slowdown.
JPMorgan economists said the impact of policy easing is expected to show up from this month on, as the July data appears to suggest a gradual bottoming out.
"The de-stocking pressure, which had dragged activity in the industrial sector in recent months, may be close to an end," JPMorgan said in a note yesterday.
The Purchasing Managers Index, a gauge of manufacturing activities, edged down to 50.1 in July from June's 50.2, official data showed earlier this month. The reading indicates the sector is still expanded, a sign of a stabilizing economy, according to some economists.
Meanwhile, the statistics bureau said fixed-asset investment in non-rural areas increased 20.4 percent in the first seven months from a year earlier, unchanged from the January-June period.
Fixed-asset investment in roads, bridges and real estate has been a key driver of economic expansion but the government is trying to reduce its contribution as it rebalances the growth pattern.
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