Growth in mainland industrial output value last month bucked the falling trend it had been showing, underscoring a recovery in domestic demand. Last month industrial output value rose 7.9 per cent despite three months of widespread flooding which had caused significant damage to the economy, Xinhua said yesterday. The agency said the flooding had triggered an increase in demand. The growth was up from a 7.6 per cent gain in July, when the rate of increase slowed from 7.9 per cent in June and 8 per cent in May. In the first eight months of this year, the industrial output value increased 7.8 per cent year on year. Merrill Lynch Asia-Pacific economist for the mainland and Hong Kong Xu Xiaonian said the rebound in industrial output was another sign of a pick-up in domestic demand, which was already being reflected in growth in fixed-asset investment and retail sales of consumer goods in real terms. 'The increase in demand has started to show impact on production,' Mr Xu said. Vice-premier Wu Bangguo has said industrial output would need to grow 11 per cent this year if the economy was to expand 8 per cent. But Mr Xu said it would be 'difficult' for Beijing to achieve the industrial-output target to attain the planned economic growth. He expected the industrial output value growth would show a hefty rise in the fourth quarter as Beijing's stimulus package took effect. Mr Xu predicted full-year industrial output growth would reach 9.5 per cent, with the economy expanding 6.8 per cent. His estimates differed from those of the State Statistical Bureau economist Qiu Xiaohua. Mr Qiu last week said whole-year economic growth target was attainable and the third-quarter growth would be faster than the first half's 7 per cent, as the flooding had laid the groundwork for a resurgence of economic growth because more investment would be set aside for reconstruction. According to Xinhua, heavy industries grew faster than light industries last month as a result of the state's stimulus package to spur domestic demand. Output value of heavy industries and some raw materials grew 7.9 per cent last month, 1.2 percentage points higher than the July figure. The output value of building materials such as cement rose 8.5 per cent and glass 13.8 per cent. Output value of light industries gained 7.8 per cent. Flood-stricken areas also reported a recovery. The industrial-output value increase in Jiangxi was 6.2 percentage points higher in August than July, while in Hubei it was 4.6 percentage points and Hunan 1.2 percentage points. But Heilongjiang's increase rate was 0.2 percentage point lower. The sales-to-production ratio reached 97.64 per cent, the highest this year and an increase of 1.35 percentage points from July.