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Investing.com -- China’s latest economic data showed a broad slowdown in July, with weakness in industrial output, consumer spending and investment pointing to fragile domestic demand, according to Bank of America.
Fixed-asset investment (FAI) growth eased to 1.6% year-on-year in the year to date, from 2.8% previously.
In single-month terms, FAI posted its first contraction since 2021, down 5.2% from a year earlier, as both infrastructure (-2.0%) and manufacturing (-0.3%) slipped into negative territory.
Meanwhile, property investment saw a further double-digit decline.
Retail sales growth slowed to 3.7% in July from 4.8% in June, missing consensus expectations of 4.6%.
BofA notes that autos, cultural and office goods, and furniture recorded the sharpest slowdowns, while “high frequency data also points to a further pullback in auto sales in August, suggesting further downside.”
Household appliance sales stayed strong, helped by subsidies, and catering services rose slightly, though tighter dining restrictions for state and government employees continued to weigh.
Industrial production growth eased to 5.7% from 6.8% in June, with manufacturing and mining output moderating, while utility supply improved. Output of PCs, mobile phones and coal contracted, but power-generating equipment and steel products saw stronger growth.
The nationwide surveyed urban unemployment rate rose to 5.2% from 5.0% in June, reflecting seasonal pressures from a record 12.2 million new graduates entering the labour market this year.
In real estate, new home prices fell for the 26th straight month, down 0.31% month-on-month in July. Only six of 70 large cities posted price gains. Residential property investment dropped 14.1% year-on-year, while completions slumped 30.6%.
BofA said the weakness in FAI and retail sales was “almost telegraphed by the recent policy stimulus of interest subsidy” and that such measures alone would be “far from enough to boost domestic demand.”
The bank added that further policy easing was unlikely in the near term, with the next potential window in September or October if external demand slows more sharply.