Growth in Chinese industrial companies’ profits slowed last month as the economy cooled, costs rose and prices fell on moderating demand and overcapacity.
Net income increased 6.3 percent from a year earlier to 502.4 billion yuan (US$82 billion), the Beijing-based National Bureau of Statistics (NBS) said yesterday, down from a 15.5 percent pace in May.
Profit from main business operations fell 2.3 percent after an 8.8 percent gain the previous month, the bureau said.
Industrial companies’ profits in the first six months of the year rose 11.1 percent to 2.58 trillion yuan, down from a 12.3 percent gain in the January-May period, and sales rose 11.4 percent to 47.8 trillion yuan, the data showed.
Profit from main business operations, a measure the statistics bureau started releasing last month, rose 7.2 percent in the first six months, slowing from an 11.4 percent pace in the January-May period.
The report covers companies with annual sales of 20 million yuan and above in 41 industry categories. Among those, 30 reported higher profits and one showed a loss, the NBS said.
The moderation in profit growth was due to a slowdown in sales gains, higher raw-material costs and a high comparative base in June last year, statistics bureau official He Ping (何平) said in an analysis of the data posted on the Web site.
Profits in coal extraction and washing slumped 43 percent in the first six months, the report showed, as prices slumped and output declined. Earnings in non-ferrous metals extraction, including copper, aluminum and lead, fell 9 percent, while and non-ferrous metals smelting and processing dropped 14.5 percent.
First-half profits in agriculture and food processing rose 21 percent, textiles increased 19 percent and auto manufacturing climbed 20 percent, the data show.
China’s government set an economic growth target of 7.5 percent this year. Expansion slowed to 7.5 percent from a year earlier in the April-June period from 7.7 percent in the first quarter.