China's industrial production slows; unemployment up

China industrial output growth falls to 17-year low but investment picks

China's industrial production slows; unemployment up

The National Bureau of Statistics, which released the figures on Thursday, only provides combined output data for January and February to smooth the impact of the timing of the Lunar New Year holiday, which fell in early February this year.

China's refiners processed 102.49 million tonnes of crude oil during January and February, according to the data from the National Bureau of Statistics (NBS).

After deducting price factors, the indicator grew 7.1 percent in real terms, accelerating from December's 6.6-percent rise, NBS spokesperson Mao Shengyong said at a press conference. Most analysts believe activity may not convincingly stabilize until the middle of the year. But several analysts including Nomura estimated growth momentum may have eased despite Beijing's push.

Pressured by weak demand at home and overseas, China's industrial output rose 5.3 percent in January-February, less than expected and the slowest pace since early 2002.

But fixed-asset investment rose 6.1 percent, while retail sales rose 8.2 percent, both more than expected. It is was also predicted that the growth will be small because reserves deplete at the main production fields and as new discoveries tend to be marginal.

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The production pick-up followed a rise in profit margins at steel mills over January and February, with earnings from making construction product rebar jumping more than 20 percent from December, according to data tracked by Jinrui Futures.

But sales of appliances and furniture softened considerably early in the year, possibly linked to a 3.6 percent drop in home sales.

In addition to fiscalstimulus such as higher local government spending and tax cuts, more monetary policy support is also expected this year. The catering industry reported a 9.7-percent increase in revenue. But sources have told Reuters that a benchmark interest rate cut is considered a last resort if other measures fail to stem the broader economic decline.

Weekly utilization rates at steel mills across China fell to 62.98 percent last week as of March 8, the lowest level in a year, data compiled by Mysteel consultancy showed.

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