China's industrial production grew by 5.9% year-on-year in the combined January-February 2025 period, surpassing market expectations of a 5.3% increase but moderating from the 6.2% growth seen in December 2024.
China industrial output growth beat forecasts
The slowdown in growth reflected softer increases in manufacturing output, which expanded by 6.9% compared to 7.4% in December. Meanwhile, electricity, heat, gas, and water production and supply activities saw growth of just 1.1%, matching the pace observed in December.
However, the mining sector saw a notable acceleration, with production rising by 4.3%, up from 2.4% in December. This increase was driven by stronger demand for raw materials and an uptick in resource extraction activities. Within the manufacturing sector, 36 out of 41 major industries recorded positive growth, signaling a broad recovery across various segments. Key standout performers included computer and communication equipment (10.6%), heat production (0.8%), non-ferrous metal smelting (6.6%), coal mining and washing (5.4%), cars (12.0%), chemical products (9.5%), and oil and natural gas (0.9%). The automotive sector, in particular, saw a strong 12% increase, underscoring robust consumer demand and production activity.
Output decreases month-over-month
On a monthly basis, however, industrial output contracted by 0.51% in February, likely reflecting seasonal factors, including the impact of the Lunar New Year holiday, which typically affects production schedules. To account for these variations, China combines the January and February data to smooth out any distortions caused by the timing of the holiday. For the full year 2024, industrial production had grown by 5.8%, providing a solid foundation for expectations of moderate expansion in 2025.
Despite the moderation in growth, the data points to continued recovery in key sectors, with rising output in both manufacturing and mining, driven by strong demand and ongoing stimulus measures from the government. Analysts are watching closely for any further policy adjustments or signs of renewed momentum in the coming months.
