China's factory output growth slowed in April, providing fresh evidence a day after poor export data that recovery in the world's third-largest economy is not yet on a rock-solid footing.

But the pace of retail sales growth surprisingly accelerated, offering encouragement to policymakers that consumers, who bought cars last month at a record clip, are helping to compensate for weakness in the industrial sector.

"It is important not to attach too much importance to one particular data point and to recognise that any recovery in China is not going to proceed in a straight line," said Brian Jackson, an economist with Royal Bank of Canada in Hong Kong.

"Policy stimulus is having an impact on domestic demand, but weak external demand is still dragging down overall growth," he said.

Growth in factory output slowed to 7.3 percent in the 12 months to April, below analysts' forecasts of a rise of 8.3 percent, which was also the reading in March.

The moderation was consistent with a 22.6 percent drop in China's exports last month and suggested factories may have jumped the gun in March by ramping up output and adding to inventories in expectation of orders that did not fully materialise.

Zhu Baoliang, deputy director of economic forecasting at the State Information Centre, a government think-tank, called the rise of 7.3 percent "okay" and said it was no cause for concern.

"It means the manufacturing industry is still on the path of recovery. Industrial production is stabilising, but we may also see some short-term fluctuations due to inventory adjustments," Zhu said.

Factory output growth is well up from the record low pace of 3.8 percent in the first two months of the year and is running above the 5.1 percent average for the first quarter, noted Xing Zhiqiang with China International Capital Corp (CICC) in Beijing.

"So, we can conclude that the economy is bottoming out," Xing said.

Economists expected output to gather momentum as the government's 4 trillion yuan ($585 billion) stimulus plan, which is concentrated on infrastructure projects, moves into top gear.

Capital spending surged 30.5 percent in the first four months, the government reported on Tuesday, and banks calculated that the growth rate in April alone was almost 34 percent.

"You can see from April's fixed-asset investment figures that local projects are mushrooming in the country in addition to strong central government spending, and this strong investment will continue to push up industrial output," said Zhou Xi, an analyst with Bohai Securities in Tianjin.

A breakdown of the data showed that factories clustered on China's seaboard, home to its major exporters, fared much worse in April than those inland, where the main focus is on the domestic market.

Output growth in western China was almost twice as strong as in the east of the country, a trend the government is keen to promote to help narrow regional inequality.

Policymakers, just as eager to rebalance the economy away from export-led industrial growth and towards consumption, will also take heart from a pick-up in annual retail sales growth to 14.8 percent in April from 14.7 percent in March.

The increase, which beat forecasts of a 14.4 percent rise, was especially impressive because consumer prices fell at a quicker pace last month, deflating the nominal sales figures.

Economists were reluctant to read too much into the retail sales figures, which includes purchases by the government as well as households.

But, coming on the heels of record car sales in April and a modest recovery in the long-depressed property market, the report suggests that consumption is holding up well for now despite widespread job losses. The government estimates that 23 million migrant workers alone have been let go during the downturn.

"Retail sales growth in real terms hit 16.7 per cent<