| Actual | Previous | Consensus | |
|---|---|---|---|
| Month over Month | 0.63% | -0.47% | |
| Year over Year | 3.5% | 5.6% | 3.6% |
Highlights
Chinese industrial production rose 3.5 percent on the year in May, slowing from an increase of 5.6 percent in April and just below the consensus forecast of 3.6 percent. This reduction in year-over-year growth partly reflects a smaller base effect from the impact of strict lockdowns in Beijing and Shanghai last year. Industrial production fell sharply on the month in April 2022 and then rebounded in May 2022, impacting year-over-year growth rates for April and May 2023.
Manufacturing output rose 4.1 percent on the year in May after an increase of 6.5 percent in April, with utilities output growth unchanged at 4.8 percent. Mining output, however, fell 1.2 percent on the year after a previous increase of 3.2 percent.
In month-over-month terms, industrial production rose 0.63 percent in May after falling 0.47 percent in April. PMI surveys showed ongoing weakness in the manufacturing sector in May, while inflation data showed price pressures remain subdued.
Today's run of data fell short of expectations, resulting in a fall in the China ECDI from 7 to minus 50 and the ECDI-P from 20 to minus 60, indicating that data are underperforming market expectations.
Manufacturing output rose 4.1 percent on the year in May after an increase of 6.5 percent in April, with utilities output growth unchanged at 4.8 percent. Mining output, however, fell 1.2 percent on the year after a previous increase of 3.2 percent.
In month-over-month terms, industrial production rose 0.63 percent in May after falling 0.47 percent in April. PMI surveys showed ongoing weakness in the manufacturing sector in May, while inflation data showed price pressures remain subdued.
Today's run of data fell short of expectations, resulting in a fall in the China ECDI from 7 to minus 50 and the ECDI-P from 20 to minus 60, indicating that data are underperforming market expectations.
Market Consensus Before Announcement
Year-over-year growth in industrial production is expected to slow to 3.6 percent in May versus growth of 5.6 percent in April which was half the rate expected.
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.
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.
