Activity and spending data for July was released by China’s National Bureau of Statistics on Tuesday, showing growth in almost all sectors coming short of market expectations.
Domestic demand came in particularly weak for the month. Fixed-asset investment grew just 3.0% year-on-year, dropping from June’s 5.7%, marking the slowest recorded monthly growth. Retail sales also edged down to 8.8% y/y from 9.0%.
Industrial output held steady last month at 6.0% year-on-year, after slowing from 6.8% in June. The Bloomberg median for production was 6.3%.
These sluggish figures more than offset an uptick in real estate activity. Housing sales and new construction projects accelerated in July, despite efforts by Beijing to rein in its runaway property sector.
According to Julian Evans-Pritchard of Capital Economics, the headwinds facing China suggest things will get better before they get worse.
“We see further downside risks to economic activity in the coming months given that credit growth is still slowing,” said Evans-Pritchard. “The recent strength of exports is also unlikely to be sustained in the face of expanding tariffs and cooling global growth.”