Industrial profits improve as sales, output recover

China’s industrial profits improved in April as output and sales rebounded amid nationwide efforts to balance the epidemic battle with economic development, data from the National Bureau of Statistics showed on Wednesday.

In April, industrial profits of designated large enterprises with annual turnover of at least 20 million yuan (US$2.86 million), totaled 478.1 billion yuan, down 4.3 percent from a year earlier.

This compares with a plunge of 34.9 percent in March.

“The improvement in April was mainly attributed to increasing investment returns last month and a low comparison base last year,” said NBS statistician Zhu Hong.

Both industrial output and sales recorded growth, with output growing 3.9 percent in April from a drop of 1.1 percent last month, while sales increased 5.1 percent from a decline of 11.1 percent.

About 80 percent of surveyed industries improved in profits, while 23 industries achieved profit growth, compared with 15 industries with growing profits in March.

Of note, major industries such as automobile, specialized equipment, electrical machinery and electronics recovered significantly, as demand greatly increased under government supportive policies.

In April, profits of forementioned four industries increased by 29.5 percent, 87.5 percent, 33.9 percent and 85.1 percent year on year, respectively, contributing 19.7 percentage points of industrial profit growth in April.

However, in the first four months, industrial profits totaled 1.26 trillion yuan, down 27.4 percent from last year, but improving 9.3 percentage points than last month.

Zhu said: “Despite the recovery in April, the business profitability situation remained 'not optimistic' as yet-to-recover market demand, retreating industrial prices and cost pressure would combine to weigh on profits.”