China industrial indicators: China industrial demand weakened further in August, despite resilience in robots, semiconductors and ESS tenders

Overview

This monthly China industrial-indicator tracker argues that August brought a further broad-based slowdown in industrial demand and investment. The report contrasts this weakness with continuing strength in selected technology- and energy-transition-related segments, especially semiconductors, industrial robots, machine tools and energy-storage tenders.

Core views

Goldman Sachs characterizes August as another month of weakening aggregate industrial conditions. Manufacturing fixed-asset investment declined 6.5% year on year, compared with a 4.4% decline in July, while infrastructure FAI fell 16.3% year on year, versus declines of 15.8% and 9.7% in July and June. Property remained a substantial drag: property GFA new completions fell 29% year on year in August, property FAI declined 26%, and year-to-date transaction volume across roughly 75 cities was down 11% year on year and 17%/36% below 2024/2023 levels. Electricity generation grew only 0.8% year on year, cement output declined 11.7%, and industrial inventories continued to rise, with six-month rolling inventories up 10% in July versus 8% in June. Although headline manufacturing PMI improved to 49.8 from 49.2, the report treats the wider investment and demand readings as constraining industrial activity. Company and end-market trackers reinforce the softer picture. Goldman Sachs estimates that Inovance industrial-automation order growth moderated sequentially in August from more than 30% year on year in July, although the company did not disclose the August growth rate. Haitian International’s domestic-order growth slowed to mid-single digits year on year, with six-month trailing orders still only about 2% higher year on year. AirTAC’s sales remained strong at 43% year on year but declined 7% month on month, compared with 51% year-on-year growth and 2% month-on-month growth in July. Process-automation cross-reads weakened further: chemicals FAI, relevant to Supcon, fell 8.1% year on year in August versus 7.4% in July, while steel FAI, relevant to Baosight, declined 6.3% in July versus 4.9% in June. Machinery-export indicators were also weak, including July machine-tool export value/volume of -5%/-30% year on year and PIMM export value/volume of -14%/-31%. Consumer-linked industrial demand softened materially. August passenger-vehicle retail sales and production fell 24% and 4% year on year, respectively, worsening from -21%/-2% in July, while the vehicle inventory alert index rose to 62.3 from 61.1. Residential air-conditioner production and sales declined 18% and 19% year on year in July, versus declines of 5% and 7% in June; export volume improved to 2% year-on-year growth from a 7% decline. China domestic smartphone shipments fell 17% year on year in June, and 5G smartphone shipments fell 12%. NEV momentum also moderated: August EV sales and production grew 18% and 19% year on year, below July’s 24% and 27%, although battery shipments rose 33% year on year in July and solar-module installations increased 27%. The report nevertheless identifies several areas holding up better than the broad industrial backdrop. Machine-tool production rose 14% year on year in August and fell 13% month on month, a better seasonal outcome than the past five-year average August decline of 20%; industrial-robot output rose 35% year on year and declined only 3% month on month, better than the typical 10% seasonal decline. Japan machine-tool total export orders increased 66% year on year in August, and exports to China rose 52% in July. Semiconductors remained the key high-growth segment, with China IC import-value growth accelerating to 84% year on year in August from 71%/72% in July/June and domestic IC production holding at 21% growth. Energy storage was another exception, though the report links the August surge to a concentrated procurement event. Monthly tendered ESS capacity reached 65.3GWh, up 88% year on year, mainly driven by Energy China’s 30GWh centralized procurement; cumulative January-August tendered capacity reached 244.5GWh, up 38%. At the same time, the average unit cost rose to Rmb0.94/Wh, up 24% year on year and 9% month on month, with EPC and ESS unit costs up 5% and 37% year on year. China’s January-July installed ESS capacity was 67.2GWh, down 7% year on year, showing that tender activity and installed capacity were moving differently. The report also tracks US ESS conditions, where planned 2026 capacity was 22.2GW, up 22% year on year, and January-July installed capacity was 9.7GW, up 15%. Other cyclical readings remained mixed but generally weak. Capex-financing new additions improved to a 12% year-on-year decline on a three-month rolling basis in August from a 30% decline in July, but manufacturing mid- to long-term bank loans declined 104% year on year in 2Q26. Industrial-enterprise PBT margin was flat at 5.9% in 2Q26, while ROE improved to 9.4% from 8.8%; utilization slipped to 73.5% from 73.7%. Construction-machinery sales were comparatively firm, with excavator sales up 19% year on year in August, but wheel-loader growth slowed to 15% from 31%.

Analysis framework

The report tracks monthly macro, investment, production, consumption, trade, tender and company-order indicators across industrial end markets. It compares year-on-year and sequential changes with prior-month readings and, where relevant, historical seasonal patterns, then uses sector-level investment and demand measures as cross-reads for selected industrial companies.

Methodology notes

• Industry AnalysisSupply-demand framework

  Monthly supply-demand and investment tracking

  Goldman Sachs combines production, orders, investment, consumption, exports and tenders to assess whether industrial demand is strengthening or weakening across end markets.

• Industry AnalysisVolume-price decomposition

  Value and volume comparisons in industrial exports and costs

  The report separates export value from volume and tracks ESS unit costs, helping distinguish price effects from underlying activity trends.

• Cycle and Business ConditionsBusiness-Cycle Inflection Analysis

  Sequential and historical-seasonality comparison

  The analysis compares August readings with July and with typical August declines to identify segments that are relatively resilient or deteriorating.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Inovance

  Industrial-automation orders are used as a company-level indicator of factory-automation demand.

  Strengths

  July industrial-automation order growth was more than 30% year on year.

  Weaknesses

  August order growth likely moderated sequentially; the specific growth rate was not disclosed.

  Risks

  Further broad industrial-demand weakness may constrain order growth.

• Haitian International (01882.HK)

  Domestic orders are used as a machinery-demand indicator.

  Strengths

  Six-month trailing orders remained about 2% higher year on year.

  Weaknesses

  Domestic-order growth moderated to mid-single digits year on year.

  Risks

  Weak manufacturing, property and infrastructure investment may weigh on demand.

• Supcon (688777.SH)

  Chemicals FAI is used as a cross-read for process-automation demand.

  Weaknesses

  Chemicals FAI declined 8.1% year on year in August, worsening from -7.4% in July.

  Risks

  Further deterioration in chemicals investment.

• Baosight (600845.SH)

  Steel FAI is used as a cross-read for production-software demand.

  Weaknesses

  Steel FAI declined 6.3% year on year in July, versus -4.9% in June.

  Risks

  Further weakness in steel investment.

Key data

• Manufacturing FAI-6.5% yoy in AugustVersus -4.4% yoy in July.
• Infrastructure FAI-16.3% yoy in AugustVersus -15.8%/-9.7% yoy in July/June.
• Passenger vehicle retail sales-24% yoy in AugustVersus -21% yoy in July; inventory alert index rose to 62.3.
• Industrial robot production+35% yoy, -3% mom in AugustMonth-on-month decline was better than the past five-year August average of -10%.
• China IC import value+84% yoy in AugustAccelerated from +71%/+72% in July/June; domestic IC production was +21% yoy.
• ESS tendered capacity65.3GWh in August, +88% yoyMainly driven by Energy China’s 30GWh centralized procurement; January-August total was 244.5GWh, +38% yoy.
• ESS average unit costRmb0.94/Wh in August+24% yoy and +9% mom.

Impact & implications

The report’s cross-sector evidence indicates that broad China industrial demand remained under pressure from weak investment, property, infrastructure, consumer demand and exports. Relative resilience was concentrated in semiconductors, automation-related production and ESS tender activity, rather than being broad-based across industrial end markets.

What to watch

• Whether manufacturing, property and infrastructure FAI stabilize after August’s further deterioration.
• Monthly order trends for industrial-automation and machinery companies, particularly Inovance and Haitian International.
• The durability of semiconductor import and domestic-production growth.
• Whether ESS tender strength converts into installations, given January-July installed capacity was down 7% year on year.
• Consumer demand, including vehicle retail sales, inventory levels, smartphone shipments and appliance production.