China industrial production disappoints in Oct, retail sales upbeat

Investing.com-- Chinese industrial production grew less than expected in October as local producers grappled with sluggish domestic demand and heightened trade tensions with China.

Retail sales for the month read slightly above expectations on support from increased consumer spending during the Golden Week holiday. 

Industrial production grew 4.9% year-on-year in October, government data showed on Friday. The print was weaker than expectations of 5.5% and slowed sharply from the 6.5% rise seen in the prior month.

Chinese producers have been grappling with sluggish domestic demand in recent years, as heightened uncertainty over the world’s second-largest economy saw businesses and customers alike sharply pare back spending. 

This, coupled with persistent deflation in factory gate prices, also weighed heavily on production, even as Beijing pledged more measures to support growth.

Heightened trade tensions with the U.S. also weighed on the sector, as export orders thinned on the prospect of higher trade tariffs. But Washington and Beijing signed a trade deal in late-October. 

Weak business spending continued in October, with fixed asset investment sliding 1.7% y-o-y, nearly twice as much as expectations for a 0.9% decline. Investment also slowed further from a 0.5% decline in the prior month. 

Retail sales were a small bright spot, rising 2.9% y-o-y in October, more than expectations of 2.7%. But growth fell slightly from the 3% rise seen in the prior month.

Retail sales were buoyed chiefly by increased spending during the Golden Week holiday, while the singles shopping event, which began in early-October, also helped.