How did China’s industrial giants perform in September?
- Industrial profits at China’s biggest firms dropped by 2.4 per cent in first nine months, compared with the same period last year
- In September, profits of large industrial firms increased 10.1 per cent compared with a year earlier
China’s industrial giants saw their monthly profits grow for a fifth consecutive month in September, while remaining negative over the first nine months of the year.
In the first nine months of the year, industrial profits at China’s biggest firms fell by 2.4 per cent year on year, with May, June, July, August and September representing the only months of growth in 2020.
In September alone, profits stood at 612.81 billion yuan (US$91.4 billion).
“Despite weaker industrial profit growth in September, we believe China’s recovery is still largely on track and maintain our real [gross domestic product] growth forecast of 5.7 per cent year on year for quarter four, up from 4.9 per cent in quarter three. We believe Beijing will neither ease further nor start to tighten in the near term,” said analysts from Nomura.
In the first nine months of the year, 21 of the 41 industrial sectors saw profits rise year on year, more than the 16 during the January-August period.
In the third quarter of the year, profits in the equipment manufacturing industry increased by 22.5 per cent, while the NBS said profits in the auto industry, general equipment and special equipment sectors all increased by more than 20 per cent, without disclosing the exact figures.
Total profits within the manufacturing sector grew 1.1 per cent in the first nine months, reversing the decline of 1.0 per cent in the first eight months of the year. Profits within the computer, communications and other electronic equipment manufacturing industry increased by 15.5 per cent.
But profits within the mining sector dropped by 37.2 per cent from a year earlier, which included profits involving mining professional and auxiliary activities falling by 130.1 per cent, a deeper loss compared with a contraction of 122.4 per cent in the first eight months of the year.
“Although the profits of industrial enterprises continued to recover steadily in the first three quarters, the accumulative operating income and profits [in the first nine months] have not returned to growth, while the increase rates of accounts receivable and finished goods inventory were still high, meaning the foundation for continued improvement in industrial profit still needs to consolidate,” said Zhu Hong, a senior statistician at the NBS.