CN: Industrial Production


Tue Oct 18 21:00:00 CDT 2016

Consensus Actual Previous
Yr/Yr % change 6.3% 6.1% 6.3%
M/M % Change 0.47% 0.53%

Highlights
Chinese industrial production rose 6.1 percent on the year in September, below the consensus forecast of 6.3 percent and down from 6.3 percent in August. Growth has been steady between 6.0 percent and 6.3 percent since April, while year-to-date growth has now been at 6.0 percent for four consecutive months. Total industrial production rose 0.47 percent on the month in September, compared with an increase of 0.53 percent in August.

The fall in headline year-on-year growth in September reflects somewhat weaker growth in manufacturing production, down from 6.8 percent to 6.5 percent, offsetting stronger growth in mining and utilities output. Auto production growth accelerated from 24.7 percent to 31.5 percent, with cement, steel products and chemicals also recording stronger output growth. This was partly offset by weaker growth in the production of coal, electricity, textiles and communication equipment.

Recent industrial production data have been consistent with PMI surveys showing moderate but relatively steady growth in the manufacturing sector. Growth, however, remains well below the pace recorded in previous years, with weak external demand and ongoing efforts by the government to restructure the Chinese economy continuing to weigh on conditions in the industrial sector.

Definition
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.

Description
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.