CN: Industrial Production

March 13, 2018 09:00 CDT

Consensus Actual Previous Revised
Yr/Yr % change 6.2% 7.2% 6.2%
M/M % Change 0.57% 0.52% 0.57%

Chinese industrial production grew 7.2 percent on the year for January and February combined, up from 6.2 percent in December and above the consensus forecast of 7.0 percent. Separate year-on-year data for January and February are not published because of the impact of differences in the timing of lunar new year holidays. Industrial production rose 0.57 percent on the month in February after an increase of 0.57 percent in January.

The pick-up in headline industrial production growth in the first two months of the year relative to December was broad-based. Growth strengthened in the manufacturing sector, with output up 7.0 percent on the year in January and February after an increase of 6.5 percent in December, though there was some divergence within the sector. In particular, growth strengthened for cement, steel products, and general equipment but weakened for automobiles, textiles, chemicals, and communication equipment. Growth in the utilities sector also accelerated from 8.2 percent on the year in December to 13.3 percent on the year-to-date, while mining output rose 1.6 percent after falling 0.9 percent previously.

The small increase in year-on-year growth in manufacturing output for the first two months of the year shown in today's data contrasts with the official CFLP manufacturing PMI survey, which showed a fall in its headline index in both January and February. The headline index for the Caixin manufacturing PMI survey, however, was unchanged in January and picked up slightly in February.

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.