Industrial profit growth eases in September
China’s industrial profit growth slowed in September due to producer price deflation and rising raw material costs weighed on the manufacturing sector.
Profits of China’s industrial firms rose 10.1 percent year on year to 646.43 billion yuan (US$96.34 billion) last month, the National Bureau of Statistics said on Tuesday.
This marked the fifth month of profit growth, albeit 9 percentage points slower than August's increase.
“The slower growth in September was mainly attributed to the deepening declines in producer prices, rising losses from asset depreciation and increasing raw material costs for auto and electronics sectors,” said NBS senior statistician Zhu Hong.
In September, China’s producer prices, a key barometer of industrial demand, fell 2.1 percent year on year, marking an eighth straight month drop.
However, China’s industrial production growth further rose to 6.9 percent in September from August’s 5.6 percent, which indicates sustained recovery for the time being.
Nomura expects weakened, yet largely on track, recovery momentum in sequential months. And Beijing will neither ease further nor start to tighten in the near term, it predicts.
In the first nine months of 2020, industrial firms’ profits fell 2.4 percent on an annual basis to 4.37 trillion yuan, narrowing from a 4.4 percent decrease in the first eight.
The higher profit growth in the first nine months of 2020 was led mainly by autos, and the metal smelting and processing industries.
Industrial profit data released by the NBS covers large firms with annual turnover of at least 20 million yuan.