UPDATE 1-China Jan-Feb industrial output signals mild recovery

Sat Mar 9, 2013 1:18am EST

(Adds detail)
    * Industrial output in Jan-Feb up 9.9 pct on year
    * Retail sales in Jan-Feb up 12.3 pct on year
    * FAI in Jan-Feb up 21.2 pct on year

    BEIJING, March 9 (Reuters) - China's annual industrial
output growth eased to 9.9 percent in the first two months from
a year ago, below market forecasts and adding to signs of uneven
recovery in the world's second biggest economy after its slowest
year of growth since 1999.
    Economists polled by Reuters had forecast industrial
production in January and February this year would grow 10.5
percent from a year earlier. 
    "This data shows that the economy is in the process of a
mild recovery and that it is still fragile," Xu Gao, chief
macro-economic analyst at Everbright Securities in Beijing, told
Reuters.
    Industrial output data on Saturday from the National Bureau
of Statistics was published alongside retail sales numbers for
January and February, which showed annual growth easing to 12.3
percent, compared with a market consensus of 15.0 percent.
    Fixed-asset investment - the main driving force of China's
recovery - exceeded expectations to rise 21.2 percent in the
first two months compared with the same period of a year
earlier. The consensus forecast in the benchmark Reuters poll
was for a 20.8 percent rise.
    Property investment saw an annual increase of 22.8 percent
for January and February combined. 
    China's official statisticians publish combined numbers for
January and February for the economy's key activity indicators
in an effort to smooth out the distortions caused by the timing
of Lunar New Year holidays.
    The holidays fell in February this year and in January in
2012. Many businesses shut down for two weeks during the holiday
period, causing a heavy seasonal skew in the numbers.
    Analysts consequently caution about reading too much into
one month's data at this time of year.
    Indicators elsewhere in China's economy, however, seem to
signal that an economic recovery, which began in the fourth
quarter of 2012 after seven successive quarters of slowing
growth, is maintaining modest momentum.
    Data earlier on Saturday showed consumer price inflation
accelerated to a 10-month high in February. Producer prices at 
factory gates remained in deflation year-on-year, but rose 0.2
percent month-on-month in a sign of increasing economic
activity.
    Trade data on Friday, meanwhile, underlined the uneven path
of the recovery, as exports soared past forecasts to jump by a
fifth in February from a year ago, while imports were
surprisingly weak, falling at the steepest pace in 13 months.
 
    That followed February surveys of factory activity, captured
in twin purchasing managers' index readings on March 1, which
showed growth cooling to multi-month lows as domestic demand
dipped and foreign order growth shrank from the previous month.
 

 (Reporting by Aileen Wang and Nick Edwards; Editing by Robert
Birsel)
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