China’s industrial output rose 5.3% in August from a year earlier, the weakest pace since July 2020, while growth of retail sales also slowed significantly and missed expectations, official data showed on Wednesday.
The growth of factory output was slower than a 5.8% year-on-year increase tipped by a Reuters poll of analysts, and compared with a 6.4% increase in July.
COVID-19 controls, prolonged semiconductor shortages and curbs on high-polluting industries have disrupted activity in the world’s second-biggest economy.
China’s vehicle sales slid in July for a third consecutive month, partly driven by the global auto chip shortages. In a bid to provide some relief for the sector, China’s market regulator on Friday fined three auto chip sales companies for driving up prices.
Some steel producers in China’s Jiangsu, Fujian and Yunnan provinces were told by the government to cut production as the country aims to curb industrial pollution.
Growth in retail sales took a big hit from rising local COVID-19 cases. Sales only rose 2.5% in August from a year ago, much lower than the forecast 7.0% rise and marking the slowest clip since August last year.
It compared with an 8.5% uptick in July.
The Chinese economy made a remarkably strong revival from last year’s coronavirus-led slump, but momentum has slowed over the past few months as businesses grapple with sporadic COVID-19 outbreaks, supply bottlenecks and high raw materials.
Social restrictions due to the COVID-19 Delta variant in several provinces have hit the catering, transportation, accommodation and entertainment industries.
China’s services activity slumped into contraction in August, a private sector survey showed, as restrictions to curb the COVID-19 virus threatened to derail the economic recovery.
KFC operator Yum China Holdings Inc, said on Tuesday its adjusted operating profit would take a 50% to 60% hit in the third quarter as the spread of the Delta variant in China led to restaurant closures and “sharply reduced sales”.
Fixed asset investment grew 8.9% in January-August from the same period a year ago, compared with a 9.0% rise tipped by a Reuters poll and a 10.3% increase in January-July.
Source: Reuters (Reporting by Liangping Gao, Gabriel Crossley and Stella Qiu; Editing by Sam Holmes)