Profits at industrial firms in China declined in the first 11 months of the year, as production slowed and factory-gate prices fell amid COVID-19 disruptions.
Industrial profits in the period fell 3.6 percent from a year earlier, the Chinese National Bureau of Statistics said yesterday.
That compared with a decline of 3 percent in the first 10 months of the year.
Photo: Reuters
“Industrial production slowed down and business operation pressure increased in November due to factors such as a resurgence in COVID cases and insufficient demand,” NBS senior statistician Zhu Hong (朱虹) said in an accompanying statement.
The oil, coal and other fuel processing industry saw profits plummet 74.9 percent year-on-year in the first 11 months, while the ferrous metals smelting and pressing sector suffered a 94.5 percent slump, bureau data showed.
China’s weakening demand for steel amid COVID-19 outbreaks and a persisting property crisis has forced mills to cut output, Bloomberg reported previously.
The bureau did not issue single-month data for last month.
Bloomberg calculations based on the data show that industrial profits dropped 8.9 percent last month from a year earlier.
The figures provided yet another sign of the weakness in China’s economy last month when strict movement restrictions were still in place to contain COVID-19 outbreaks.
Growth in industrial output last month slowed to the weakest since May, while factory-gate prices continued to contract.
The economy is bracing for increasing strain after the government abruptly dropped its “zero COVID-19” policy. Soaring infections across the nation are keeping people at home, causing a slump in travel and economic activity.
Looking ahead, COVID-19 case spikes would curb the recovery of industrial profits in the short term and the sector remains to be pressured by contracting demand, supply-chain shocks and weakening expectations, Zhu said.
“We must better coordinate COVID controls and economic and social development, ensure industrial and supply chain smoothness and take effort[s] to expand domestic demand,” Zhu said.
Economists surveyed by Bloomberg forecast that the expansion of the world’s second-largest economy would moderate to just 3 percent this year, the slowest rate since the 1970s barring 2020’s pandemic plunge, before picking up to 4.9 percent next year.
Profits at foreign firms declined 7.8 percent in the first 11 months of the year, worsening from a 7.6 percent decrease in the first 10 months. Private firms saw their profits sink 7.9 percent, while those of state-owned enterprises were up 0.5 percent.
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