Tumbling commodity prices see earnings increase fall to 4.9pc Profit growth at mainland industrial companies fell to a record low of 4.9 per cent for the first 11 months of the year, dragged down by steep declines at oil producers, metal makers and power firms as commodity prices dropped and the world's fourth-largest economy slowed. Industrial companies earned a combined 2.41 trillion yuan (HK$2.73 trillion) in profit in the January-November period, against 2.3 trillion in the same period last year, the National Bureau of Statistics said. The figure marked a rapid deceleration from annual growth of 19.4 per cent in the first eight months of the year and from 36.7 per cent in the first 11 months of 2007. Income grew 31 per cent in 2006, 23 per cent in 2005 and 40 per cent in 2004. Mainland stocks retreated further yesterday in thin trading, slipping for a fifth consecutive day as sentiment remained weak. The index, the worst performer in the world, has dropped 64.81 per cent this year on investor concern that global financial woes will be reflected in corporate earnings. The market topped the world in performance last year, with a 96.66 per cent gain. Mainland gross domestic product growth slowed to 9 per cent in the third quarter from 11.9 per cent last year. Expansion would further weaken in the fourth quarter, economists said, based on the latest data. Since October, many industrial firms have seen a sharp decline in output and sales. Washing machine output, for example, dropped 10.7 per cent year on year to 3.7 million units last month, according to National Bureau of Statistics data released on Wednesday. This compared with 10.9 per cent annual growth in the January-November period. Sales of washing machines have dropped since October, as the global financial crisis dampened consumption in both domestic and overseas markets. Mainland exports fell for the first time in seven years in last month. Falling prices of commodities and raw materials in the global market have also eaten into the earnings of industrial companies. The price of cold-rolled steel plummeted 42.7 per cent from its high of 7,309 yuan per tonne from June to last month, according to figures from the Beijing Lange Steel Information Research Centre. Income of state-owned and state-controlled companies fell 14.5 per cent in the 11-month period to 798.5 billion yuan, the bureau said on its website yesterday. The bureau said income at privately owned industrial companies was up 36.6 per cent at 549.5 billion yuan. Earnings of overseas-invested companies - including those from Hong Kong, Macau and Taiwan - dropped 3.1 per cent to 637.4 billion yuan over the same period. Companies with other types of ownership posted profit increases. Oil refineries and coking plants reported a net loss of 126 billion yuan, against a profit of 24.5 billion yuan in the same period last year. Electricity generator profit plummeted 84.1 per cent, followed by the chemical fibre sector with a drop of 74.9 per cent. The non-ferrous metals and processing industry reported a drop of 34.1 per cent in income, while the iron and steel sector recorded a decrease of 13.7 per cent. But coal industry profit rose 133.7 per cent, while the crude and natural gas exploration industries posted a 37.2 per cent rise in profit. Zhang Ping, the minister in charge of the National Development and Reform Commission, told legislators on Wednesday that the government would take measures to boost development in nine key industries as the global financial crisis dealt the mainland a heavier than expected blow.