China: strong rebound in industrial production and retail sales

The data on industrial production arrives for the month of February and, having passed the Chinese New Year, the major holiday for that community, we have a rebound in economic indicators.

China's industrial production expanded 5.9% y/y in January-February 2025, higher than market forecasts of a 5.3% increase, but down from the 6.2% growth recorded in December 2024.

The moderation in growth was driven by a smaller increase in the manufacturing sector (6.9% versus 7.4% in December 2024), while the production and supply of electricity, heat, gas and water grew at the same pace as in December (1.1%).

Meanwhile, growth in the mining industry accelerated (4.3% versus 2.4%). Within the manufacturing sector, 36 of the 41 major sectors saw growth , most notably computers and communications (10.6%), heat production (0.8%), nonferrous metal smelting (6.6%), coal mining and washing (5.4%), automobiles (12.0%), chemicals (9.5%), and oil and natural gas (0.9%).

On a monthly basis, industrial production shrank by 0.51% in February. In 2024, industrial production grew by 5.8%.

China combines industrial production data from January and February to cushion the impact of the Lunar New Year holiday, which falls at different times each year. There has been an upturn in production, but a little slower, and we will have to wait until next month to have a figure adjusted for the New Year.

Here is the relevant graph:

Let's move on to the consumer side. Retail sales in China increased 4.0% y/y in the first two months of 2025, accelerating from 3.7% growth in December, in line with market forecasts.

It was the strongest increase in retail turnover since last October , boosted by increased consumption during the spring holidays.

Sales grew for most components, including cereals, oil and food products (11.5% vs 9.9% in December obviously in a holiday period), tobacco and alcohol (5.5% vs 10.4%), clothing, shoes, hats (3.3% vs 0.8%), cosmetics (4.4% vs 0.8%), sports and entertainment (25.0% vs 16.7%), household and leisure items. 0% vs 16.7%), household appliances (10.9% vs 39.3%), office supplies (21.8% vs 9.1%), jewelry (5.4% vs -1.0%), personal care (5.7% vs 6.3%), medicines (2.5% vs -0.9%) and petroleum products (0.9% vs -2.8%).

However, sales declined for beverages (-2.6% vs. -8.5%) and automobiles (-4.4% vs. 0.5%). China merges January and February retail sales data to account for the different timing of the lunar event each year, ensuring a more consistent and accurate comparison. In 2024, retail turnover increased by 3.5%.
Here is the relevant graph:

Therefore, despite the holiday period, the Chinese economy managed to grow in the first two months of the year, although the data is distorted by the Chinese New Year. Production did not recover at maximum speed, but rather slowly, while consumer sales were good during the holiday period.

There are still no signs of the trade war applied by Trump with the tariffs, but these have only been in effect for a few weeks and therefore the impact is not yet clear. We will have to wait until March for a more complete picture of the Chinese economy .

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The article China: strong rebound in industrial production and retail sales comes from Economic Scenarios .

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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/cina-rimbalzo-forte-della-produzione-industriale-e-delle-vendite-al-dettaglio/ on Mon, 17 Mar 2025 10:00:36 +0000.