Industrial profits extend slump into seventh month


Steep decline: A worker welds metal at a factory in Hangzhou in China’s eastern Zhejiang province. Profits for the ferrous metal smelting and rolling processing industry have fallen 90.5% in the first seven months of this year. — AFP

BEIJING: Profits at China’s industrial firms fell 6.7% in July from a year earlier, extending this year’s slump to a seventh month with weak demand squeezing companies as a post-pandemic recovery faltered in the world’s second-biggest economy.

Earnings shrank 15.5% year-on-year for the first seven months.

This was following a 16.8% decline in the first half of the year, data from the National Bureau of Statistics (NBS) showed.

Profits were down 8.3% in June, according to the bureau, which only occasionally publishes monthly figures.

“Commodity prices are running low, the pressure on raw material costs in the midstream and downstream industries has eased.

“Unit cost of industrial enterprises has improved overall,” NBS statistician Sun Xiao said in an accompanying statement, adding that unit costs in July posted the first year-on-year decrease since the beginning of this year.

Big Chinese manufacturers posted losses for the first half, with engineering firm China Aluminum International reporting a net loss of 830.6 million yuan (US$114.2mil), compared with a year-earlier net profit of 123.6 million yuan.

Major banks have downgraded their growth forecasts for the year to below the government’s target of about 5%.

This is as recovery sputters on a worsening property slump, weak consumer spending and tumbling credit growth, prompting the authorities to slash interest and promise further support.

State-owned enterprises saw earnings tumble 20.3% in the first seven months of this year.

Foreign firms posted a 12.4% decline and private-sector companies recorded a 10.7% fall, a breakdown of the data showed.

Profits dived for 28 of 41 major industrial sectors during the period, with the ferrous metal smelting and rolling processing industry reporting the deepest slump at 90.5%.

The central bank said this month it would keep its policy “precise and forceful” to support recovery.

It remains to be seen if more significant measures would come to shore up growth.

President Xi Jinping last Tuesday told a forum in South Africa that the economy was resilient and the fundamentals for long-term growth remained unchanged.

Industrial profit numbers cover firms with annual revenues of at least 20 million yuan (US$2.77mil) from their main operations. — Reuters

Follow us on our official WhatsApp channel for breaking news alerts and key updates!

China , industrial , manufacturing , inflation , PMI

   

Next In Business News

CIMB and Gentari ink MoU to drive green mobility and value chain decarbonisation
AmInvest declares income distribution of RM142.8mil
S P Setia's commercial offerings in Semenyih see strong demand and full take-ups.
Honda, Nissan aim to close merger talks in June 2025, source says
Asia shares, risk assets cheer US inflation relief
Singapore Nov core inflation at 1.9% y/y, lowest in almost 3 years
KLCC Holdings takes over Bandar Malaysia
Creating more changes for foreign investors
No impact on TNB from ICPT implementation
Tuju Setia’s order book hits RM2bil with RM389mil Milla Residence contract

Others Also Read