CN: Industrial Production

Thu Sep 14 07:00:00 CDT 2017

Consensus Actual Previous
Yr/Yr % change 6.6% 6.0% 6.4%
M/M % Change 0.46% 0.41%

Chinese industrial production grew 6.0 percent on the year in August, slowing from 6.4 percent in July and falling short of the consensus forecast of 6.6 percent. Industrial production rose 0.46 percent on the month in August after an increase of 0.41 percent in July.

The decline in headline industrial production growth in August was driven by non-manufacturing output. Utilities output grew by 8.7 percent on the year in August, slowing from 9.8 percent in July, while mining output fell by 3.4 percent on the year after a drop of 1.3 percent in July. Manufacturing output, in contrast, saw a small pick-up in year-on-year growth from 6.7 percent to 6.9 percent. Stronger growth in automobiles, chemicals, electric machinery, and communication equipment outweighed weaker growth in steel products, textiles, and general equipment.

The small increase in year-on-year growth in manufacturing output shown in today's data is broadly in line with the official CFLP manufacturing PMI survey and the Caixin PMI survey, which both showed an increase in their headline index in August.

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.