CN: Industrial Production

Tue Nov 10 23:30:00 CST 2015

Consensus Actual Previous
Yr/Yr % change 5.8% 5.6% 5.7%
M/M % Change 0.46% 0.38%

Industrial output gained 5.6 percent on the year in October, below expectations of a 5.8 percent increase. On the month, output was up 0.46 percent after gaining 0.38 percent in September. For the 10 months through October, output was up 6.1 percent compared with an 8.4 percent gain for the same months in 2014.

Among the subcategories, auto output gained 4.9 percent after declining for the previous three months. Communications rebounded 11.7 percent after increasing 10.5 percent in September. Cement and steel continued to decline but at slower rates. The remaining nine categories all grew at slower rates in October. They included machinery, transport equipment, textiles, chemicals and power & thermal to mention a few.

Today's numbers will do little to change the view that China's economy is slowing. The People's Bank of China is still seen by many as having spare capacity to keep easing monetary policy in an effort to cushion the economy as it moderates, and that in itself is probably making some relatively relaxed about any data "misses".

Industrial production measures the change in the total inflation adjusted value of output produced by manufacturers, mines and utilities. Data are compared with the same month a year earlier.

Chinese data can have a broad impact on the currency markets due to China's dominant influence on the global economy and investor sentiment. It's a leading indicator of economic health. Production is the dominant driver of the economy and reacts quickly to ups and downs in the business cycle. No data are published in February for January.

The industrial growth rate is used to reflect a certain period of increase or decrease in volume of industrial production indicators. The indicator can be used to estimate the short term trend of the industrial economy, to judge the extent of the economic boom and also to be an important reference and basis for the formulation and adjustment of economic policies.