CN: Industrial Production


Thu Jan 18 01:00:00 CST 2018

Consensus Actual Previous Revised
Yr/Yr % change 6.0% 6.2% 6.1%
M/M % Change 0.52% 0.48% 0.47%

Highlights
Chinese industrial production grew 6.2 percent on the year in December, up from 6.1 percent in November and above the consensus forecast of 6.0 percent. Industrial production rose 0.52 percent on the month in December after an increase of 0.47 percent in November. Annual growth in industrial production strengthened from 6.0 percent in 2016 to 6.6 percent in 2017.

Relatively stable headline industrial production growth in December reflects offsetting moves in key sectors. Growth moderated slightly in the manufacturing sector, with output up 6.5 percent on the year in December after an increase of 6.8 percent in November. Growth in the utilities sector, however, strengthened, with output there up 8.2 percent on the year after increasing by 4.5 percent in November,. There was also a smaller drop in mining output, down 0.9 percent on the year after a decline of 1.7 percent in November. Within the manufacturing sector, year-on-year growth weakened for automobiles, electric machinery, and communication equipment but strengthened for chemicals and steel products.

The small decline in year-on-year growth in manufacturing output shown in today's data is broadly in line with the official CFLP manufacturing PMI survey, which showed a fall in its headline index in December. The headline index for the Caixin manufacturing PMI survey, in contrast, advanced in December.

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.