Industry: the July slowdown is temporary, but uncertainties lurk

According to the preliminary data, industrial production – both unadjusted and calendar adjusted – was up 3.4% year-on-year in July, a considerable slowdown compared to the 11% seen in June. But the slower growth rate is mostly due to the statistical base effect – in 2014, the seasonally adjusted volume of monthly production reached its peak in July. In the coming months, year-on-year growth will rebound, due to the much lower base.

Seasonally adjusted industrial productio150908_Ipar 1_ENn decreased by 0.7% compared to the previous month. After the 1.1% jump in June, this can be seen as an expected correction, although this correction was somewhat more pronounced than previously expected. Due to the global uncertainties, especially regarding the deceleration of the Chinese economy, the so far rising trend in the seasonally adjusted production may taper off in the coming months, with the montly average in August-December failing to rise above the average seen over April-July.