China economy: ‘uneven’ corporate performance in spotlight as industrial profit growth slows in April
- Record-setting commodity prices in recent weeks, and China’s underperforming consumer goods sector, weigh heavy on manufacturers
- For April, profits at China’s industrial firms rose by 57 per cent, year on year – down from a 92.3 per cent increase in March
With high commodity prices preventing many factories from being able to turn a profit, overall earnings at China’s industrial firms grew at a slower pace in April.
For April, profits at China’s industrial firms rose by 57 per cent, year on year, to 768.63 billion yuan (US$120.22 billion). That was down from a 92.3 per cent increase in March, data from the National Bureau of Statistics (NBS) showed on Thursday.
For the January-April period, industrial firms’ profits grew 106 per cent from the same period a year earlier, to 2.59 trillion yuan – bolstered by a low comparison base because of a virus-related plunge in activity early last year.
“The improvement in corporate performance is still uneven,” NBS official Zhu Hong said in a statement accompanying the data. “The profitability of some consumer goods industries has not yet recovered to pre-epidemic levels. Coupled with the high prices of bulk commodities, this has increased the pressure on the production and operation of midstream and downstream industries.”
This good time may not last, as the government is clamping down on high commodity prices
Firms specialising in chemical products and metals processing recorded some of the highest year-on-year profit increases over the year’s first four months, according to NBS data, as they recovered from the coronavirus-induced slump in economic activity in the same period last year.
