Chart of the Day: China’s Industrial Profits Slump Eases

The decline in profits at China’s major industrial companies eased last month, helped by the slew of stimulus measures introduced over the past few months to support economic growth, although profits for the first 10 months fell the most this year, official data show.

Industrial profits dropped by 10% year-on-year in October, narrowing from a 27.1% slump the previous month and showing the first improvement since July, led by a recovery in the manufacturing sector, data released Wednesday by the National Bureau of Statistics (NBS) show. Even so, profits for the January-October period fell 4.3% year-on-year, widening from a 3.5% drop in the first nine months. The data cover industrial companies with annual turnover from their core business of 20 million yuan or more.

China’s Industrial Profits Slump Shows Signs of Easing

“In October, the synergy of existing policies and additional stimulus continued to act on the economy, contributing to the stable growth of major industrial companies and the narrowed decline in their profits,” Yu Weining, a statistician with the NBS’s industrial department, wrote in an analysis of the data. “Most industries saw an improvement in profits compared with the previous month, with sectors including equipment manufacturing and high-tech manufacturing providing strong support (to the overall performance) as new growth drivers,” Yu wrote. “The profit decline in raw materials processing and consumer goods manufacturing narrowed significantly.”