China producer prices shrink the most in 11 months

China's producer prices dropped by 2.9% year-on-year in October 2024, accelerating from a 2.8% fall in September and exceeding market expectations of a 2.5% decline.

China producer prices shrink the most in 11 months

This marks the 25th straight month of deflation in producer prices and represents the steepest contraction since November 2023, underscoring persistently weak domestic demand despite Beijing’s ongoing efforts to reverse the trend. Production material costs fell further (-3.3%, unchanged from September), driven by deeper declines in mining (-5.1% vs. -2.5%), raw materials (-4.0% vs. -3.2%), and processing (-2.9% vs. -3.3%).

Consumer goods remain weak

Consumer goods prices also remained weak (-1.6% vs. -1.3%), with particular softness in food (-1.6%), clothing (-0.4% vs. -0.3%), and durable goods (-3.1% vs. -2.1%), though daily-use goods inched up slightly (0.1% vs. -0.3%). Month-over-month, producer prices eased by 0.1%, following a 0.6% drop in September. For the year’s first ten months, producer prices have contracted by 2.1%, highlighting ongoing deflationary pressures within China's industrial sector.