Industrial profit growth picks up in March

China's major industrial firms in March posted their fastest profit growth since August, but the first quarter rate was down from a year earlier.

Profits of industrial companies with annual revenue of more than 20 million yuan (US$2.97 million) surged 13.9 percent year on year in March, a sharp rebound reversing the 14 percent drop in the January-February period, the National Bureau of Statistics said on Saturday.

For the first quarter, accumulated profits dropped 3.3 percent from the same period last year, down 10.7 percentage points from January-February.

Industrial profit growth quickened, mainly boosted by the faster growth of production and sales and the steady rebound of prices, said Zhu Hong, a senior statistician at the bureau.

In March, the value-added industrial output of major enterprises increased by 8.5 percent year on year in real terms, 3.2 percentage points faster than in the first two months.

The operating revenue of industrial enterprises jumped 13.7 percent from a year earlier, up 10.4 percentage points from January-February.

Factory-gate prices edged up 0.4 percent year on year last month, faster than the 0.1 percent rise in January-February, reversing the cooling trend of the previous eight consecutive months.

Producer purchase prices also rose 0.2 percent from a year earlier, 0.1 percentage points faster than the first two months. The higher prices contributed to 26.8 billion yuan in industrial profit growth in March.

Meanwhile, profits of key industries such as the automobile, oil processing, iron and steel and chemical sectors — have picked up significantly.

As a result of price cuts and the launch of new models, auto production and sales rebounded, with the profits of the auto manufacturing industry increasing by 1 percent year on year, reversing a 42 percent slump in profits in January-February.

Profits in the oil processing, iron and steel, and chemical industries fell 13.9 percent, 15.2 percent and 3.2 percent, narrowing sharply by 56.5 percentage points, 43.8 percentage points and 24 percentage points from the first two months.

The four key industries together added 12.8 percentage points to the overall profit growth of major industrial enterprises.

In addition, positive factors including the value-added tax rate reduction, the low base in the same period last year, and the increase in investment income also helped pull up profit growth.

And the performance of industrial enterprises has improved with lower unit costs, lower leveraging, faster inventory turnover and a rebound in profitability, Zhu said.