SHANGHAI’S plan for an economic recovery is facing renewed challenges as all its economic activity indicators worsened in July, the Shanghai Statistics Bureau said yesterday.
Industrial production declined 4.3 percent from a year earlier to 246.6 billion yuan (US$38.6 billion) last month, down further from the 1.9 percent fall in June.
Retail sales, the broad measure of consumer demand, rose 7.7 percent to 83.6 billion yuan, slowing from the pace of 9.6 percent a month earlier.
Trade shed 1.4 percent to 243.8 billion yuan from a year earlier, deteriorating from the zero change in June. Exports lost 8.7 percent in July although imports still managed to increase 4.9 percent.
Fixed-asset investment grew 8.7 percent to 316.1 billion yuan in the first seven months, also down from the 9.6 percent gain in the first six months.
“The overall performance was worse than expected,” said Li Maoyu, an analyst at Changjiang Securities Co.
“The data showed a weak foundation for the economic recovery that emerged in the second quarter, and the pace of deterioration is quick.”
Li cautioned that the corrections in the stock market may affect the city’s growth in the second half with less output in the services sector.
Finance, part of the services sector, powered Shanghai’s growth in the first half. Output from various financial services and products jumped 30.1 percent in the first six months, partly due to an active stock market.
Shanghai’s gross domestic product grew 7 percent in the first half of the year, up from the increase of 6.6 percent in the first three months and catching up with the national pace for the first time in seven years.
The city’s economic output totaled 1.18 trillion yuan in the first six months, with the service sector gaining 10.2 percent and producing 67.1 percent of the total output, compared with 67 percent in the first quarter and last year’s 64.8 percent.
The city’s manufacturing sector is also under pressure, Li said.
The six key industries — information technology, automaking, oil, refined steel, machinery equipment and biochemical — posted a combined loss of 2.9 percent last month.