(Yicai Global) Aug. 17 -- China’s key economic indicators dipped last month as high temperatures, record rainfall and sporadic outbreaks of Covid-19 hampered both production and demand. However, the economy should pick up in the second half, industry insiders said.

Industrial firms of a designated size, with an annual turnover of more than CNY20 million (USD3.1 million), saw growth in industrial value-added drop 1.9 percentage point in July from June, despite a year-on-year gain of 6.4 percent, while the total retail sales of consumer goods slowed 3.6 percentage point from June, but increased 8.5 percent year on year, according to data released by the National Bureau of Statistics yesterday.

The economy will continue to recover steadily and major macro indicators will stay within a reasonable range as the quality of development rises, NBS spokesperson Fu Linghui said.

The novel coronavirus outbreaks will inevitably affect the economy, especially labor-intense businesses such as consumption, in July and August, but won’t change the recovery trend for the rest of the year, Wu Chaoming, chief economist from Chasing Securities, told Yicai Global.

Extreme weather in central Henan province and other areas last month led to a slowdown in demand and hence a drop in production, said Wang Jingwen, macro researcher at China Minsheng Bank.

In the first seven months, fixed asset investment advanced 10.3 percent from a year earlier to CNY30.25 trillion (USD4.6 trillion), 2.3 percentage points slower than the January to June period.

Investment in infrastructure remains weak. Local governments issued CNY1.4 trillion (USD216 billion) worth of special bonds from January to last month, making up only 37 percent of this year’s quota. Special bonds issued in July dropped to CNY340.3 billion (USD52.5 billion) from CNY430.4 billion in June.

Editor: Kim Taylor