Investing.com -- Chinese industrial production grew less than expected in April, data showed on Tuesday, further indicating that a post-COVID economic rebound in the country was running dry.
Softer-than-expected retail sales data also showed that while consumer spending rebounded sharply this year, it still did so below market expectations, which could herald a more sluggish economic recovery this year.
Industrial production grew 5.6% in April from the prior year, data from the National Bureau of Statistics showed, much lower than analyst estimates of 10.9%, but higher than March’s reading of 3.9%.
Sluggish growth in industrial production comes as China’s massive manufacturing sector continued to struggle with declining local and overseas demand, which in turn saw the sector unexpectedly contract in April.
The manufacturing sector is also a key economic engine for China, and points to an uneven recovery in the country despite the withdrawal of most anti-COVID measures earlier this year.
Industrial production rose 3.6% so far this year, slower than the 6.5% growth seen in the first four months of 2022.
Retail spending in China continued to increase after the lifting of anti-COVID measures, benefiting greatly from pent-up demand. But spending still rose at a slower-than-expected pace through April.
Chinese retail sales grew 18.4% in April, less than expectations for growth of 21%, but well above the 10.6% rise seen in March.
Still, disappointing inflation data released earlier this month showed that the recovery in retail spending was still insufficient in pushing up local prices, which in turn pointed to a consistent disinflationary trend in the country.
Sluggish industrial production saw factory gate inflation decline even further through April.
Other economic data released on Tuesday also posited a weak outlook for the Chinese economy. Fixed asset investment - a key indicator of business sentiment for the coming months - grew 4.7% in April, lower than expectations for growth of 5.5%, and slower than the 5.1% rise seen through March.
While the government has rolled out a slew of measures to shore up public spending, private investors have so far remained wary of moving capital to China, with the weak fixed asset investment figure reflecting that caution.
While the Chinese economy grew more than expected in the first quarter of 2023, growth was largely skewed towards a rebound in services and consumption. The country's key economic drivers - particularly manufacturing and the property sector - still remained under pressure, heralding an uneven economic rebound this year.