China Better industrial production, sluggish investment, slower retail sales growth

Economics Research 15 September 2026 | 1:43PM HKT

China: Better industrial production, sluggish investment, slower retail sales growth; lowering Q3 GDP forecast

Bottom line: Lisheng Wang | China’s August activity data were mixed, underscoring the economy’s continued Goldman Sachs (Asia) L.L.C.

imbalance between strong supply and weak demand. Industrial production (IP) beat expectations, with growth accelerating to 5.2% yoy in August from 4.5% yoy in July amid stronger exports and faster output growth in the electric machinery, chemicals, and pharmaceuticals industries. By contrast, fixed asset investment (FAI) and retail sales missed expectations somewhat. FAI contracted 10.8% yoy in August on a single-month basis, although favorable base effects narrowed the decline from -12.8% yoy in July. Retail sales growth slowed to 0.4% yoy in August from 0.6% yoy in July, with both goods and restaurant sales growth weakening. The Services Industry Output Index, reported in real terms and closely correlated with tertiary GDP growth, eased to 4.1% yoy in August from 4.3% yoy in July. Labor market conditions also softened, as the unemployment rate rose by more than seasonal patterns would suggest. Reflecting weaker-than-expected quarter-to-date activity data, we lower our real GDP growth forecast for Q3 to 4.4% yoy (vs. 4.6% previously). This mechanically reduces our 2026 full-year real GDP forecast to 4.5% yoy (vs. 4.6% yoy previously).

Industrial production: 0 (5, 0)

Fixed asset investment: 0 (2, 0)

Industrial production (IP): +5.2% yoy in August (GS forecast: +4.6% yoy; Bloomberg consensus: +4.8% yoy), vs. +4.5% yoy in July. Note that sequential figures are highly sensitive to the specific seasonal adjustment methodology (NBS estimates: +0.5% mom sa non-annualized in August, vs. +0.1% mom sa non-annualized in July; GS estimates: +0.7% mom sa non-annualized in August, vs. -0.3% mom sa non-annualized in July).

Fixed asset investment (FAI): -7.2% ytd yoy in August (GS: -7.3% ytd yoy; consensus: -7.1% ytd yoy), vs. -6.7% ytd yoy in July; August single-month growth by GS estimates: -10.8% yoy, vs. -12.8% yoy in July (sequential growth by GS estimates: +0.5% mom sa non-annualized in August, vs. -6.1% mom sa non-annualized in July).

Retail sales: +0.4% yoy in August (GS: +0.4% yoy; consensus: +0.8% yoy), vs. +0.6% yoy in July (sequential growth by GS estimates: -0.1% mom sa non-annualized in

Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to

August, vs. -0.4% mom sa non-annualized in July).

Services industry output index: +4.1% yoy in August, vs. +4.3% yoy in July (sequential growth by GS estimates: +0.3% mom sa non-annualized in August, vs. +0.2% mom sa non-annualized in July).

n Nationwide: 5.3% in August, vs. 5.2% in July. n 31 major cities: 5.3% in August, vs. 5.2% in July.

Property-related activity data:

n Floor space sold: -14.7% yoy in August, vs. -13.5% yoy in July (value of sales: -12.1% yoy in August, vs. -8.8% yoy in July). n Floor area under construction: -12.8% yoy in August, vs. -12.7% yoy in July. n New home starts: -31.0% yoy in August, vs. -27.8% yoy in July. n New home completions: -28.4% yoy in August, vs. -18.7% yoy in July. n Real estate investment: -25.4% yoy in August, vs. -27.5% yoy in July.

1. Industrial production (IP) growth rebounded to 5.2% yoy in August from 4.5% yoy in July amid stronger export growth. Sequentially, we estimate IP gained 0.7% mom non-annualized in August (vs. -0.3% mom non-annualized in July; Exhibit 1). By industry, the July-to-August acceleration in year-on-year IP growth was led by faster output growth in the electric machinery, chemicals, and pharmaceuticals manufacturing industries, more than offsetting slower output growth in computer and other equipment industries (Exhibit 2). Among major industrial products (which differ from by-industry IP breakdown), year-on-year growth in industrial robot output and metal cutting machine output rose to 34.6% and 14.1%, respectively, in August from 30.2% and 4.0% in July, while smartphone output growth remained sluggish…