China’s industrial production showed a slower-than-expected growth of 5.3% year-on-year (yoy) in October 2024, falling short of the forecasted 5.6% increase. This represents a slight deceleration from September’s four-month high of 5.4%. While industrial output growth remained positive, several sectors showed signs of cooling, particularly in areas like electricity and gas production. This slowdown could signal potential challenges for the Chinese economy as it continues to navigate a complex global landscape.

Sectoral Performance: Mixed Results Across Industries

The slowdown in overall industrial production was driven by a sharp dip in electricity, heat, gas, and water production, which fell from 10.1% growth in September to just 5.4%. However, manufacturing output saw a slight acceleration, rising 5.4% in October, up from 5.2% in the previous month. Mining also showed improvement, with output growth climbing from 3.7% to 4.6%. These mixed results highlight the varied performance across different sectors of China’s industrial landscape.

Key Sectors Showing Strong Growth

Despite the overall slowdown, many key manufacturing sectors reported strong performance. The computer and communication equipment sector led the charge with a 10.5% increase, followed by non-ferrous metal smelting (up 7.7%) and chemicals (up 6.9%). The automotive industry also saw healthy growth at 6.2%, and production in oil and natural gas jumped by 5.8%. These sectors are expected to continue driving industrial output and contributing to overall economic resilience.

Outlook for China’s Industrial Sector

For the first ten months of 2024, industrial output increased by 5.8%, a solid performance, despite the month-on-month slowdown. The moderation in production growth may reflect external pressures, such as weaker global demand and domestic adjustments. As China faces ongoing economic challenges, the mixed results in industrial production emphasize the need for balanced growth across sectors. The government’s policy response will likely focus on supporting key industries and boosting domestic consumption to sustain long-term growth.