The industrial and retail sectors of China weakened in August as production and sales advanced to one-year lows as new outbreaks of coronaviruses and supply problems threaten the country’s economic recovery.
Industrial production advanced 5.3% in August compared to the previous year, after rising 6.4% in July and marking the weakest pace since July 2020, data from the National Statistics Agency showed this Wednesday. Analysts expected an advance of 5.8%.
Consumer spending was also affected by the increase in local Covid-19 cases and flooding, with sales advancing just 2.5% in August over the same period last year, well below the forecast for a 7.0% increase. and the weakest pace since August last year.
“Economic growth slowed in August as consumption was hurt by the impact of Covid’s surges and investment remained weak,” said Louis Kuijs, head of Asia economics at Oxford Economics.
“Meanwhile, a new outbreak that started a few days ago in Fujian poses downside risks to our forecast of accelerating fourth-quarter growth after a weak third quarter.”
The world’s second-largest economy has seen a strong rebound after last year’s losses from the coronavirus, but strength has slowed in recent months due to supply-chain bottlenecks, semiconductor shortages, restrictions on polluting industries and real estate investment.
In the industrial sector, production restrictions affected aluminum and steel production, while a sharp cut in fuel export quotas hurt China’s oil production.
Social restrictions due to the Delta variant of Covid-19 in several provinces affected the hospitality, food, transportation and entertainment sectors.
Subscribe to EXAME and access the most important news in real time.