July output growth flat

PUBLISHED : Tuesday, 10 August, 1999, 12:00am
UPDATED : Tuesday, 10 August, 1999, 12:00am

The mainland's industrial output rose slightly last month, but economists predicted a downward trend in the coming months.

Industrial output, a benchmark indicator of factory activity, rose 9.3 per cent year on year to 162.1 billion yuan (about HK$151.19 billion) last month, up from 9.1 per cent in June, the official Xinhua news agency said, citing figures from the State Statistical Bureau.

'July's growth in industrial output appears to be flat as the government's investment programme has lost steam,' Chu Siu-wah, senior economist at GK Goh Securities, said yesterday.

In the first seven months, the value-added output was up 9.4 per cent year on year to 1.10 trillion yuan.

That remains flat over the 9.4 per cent year-on-year increase in the first half of this year, and lower than the 10.1 per cent in the first quarter.

'I would say industrial output is likely to continue its downward trend throughout the year, ' Mr Chu said.

Economists said the lacklustre industrial output is likely to strengthen Beijing's determination to use public spending again to boost the faltering economy.

Beijing is said to be considering another stimulus package of between 60 billion and 100 billion yuan this year.

Last year, Beijing's huge stimulus package of 200 billion yuan in state debt proceeds and state bank loans helped power the economy to 7.8 per cent growth.

But the growth slowed to 7.6 per cent in the first half due to sluggish consumption and falling exports.

Last month, heavy industrial output rose 9.4 per cent year on year to 93.5 billion yuan, while light industrial output was up 9.1 per cent to 68.6 billion yuan.

Output of state-owned firms rose 7.9 per cent year on year to 93 billion yuan while output of collective-owned firms rose 8.2 per cent to 27.8 billion yuan.

Output by foreign-invested ventures reached 34.3 billion yuan, up 12.9 per cent.

Power generation rose 6.9 per cent year on year to 107.1 billion kilowatt hours, the bureau said.