China’s industrial profits slump in April as coronavirus curbs provide ‘big shock to production’

Profits at China’s industrial firms fell at their fastest pace in two years in April as high raw material prices and supply chain chaos caused by coronavirus curbs squeezed margins and disrupted factory activity.

Profits shrank by 8.5 per cent from a year earlier, swinging from a 12.2 per cent gain in March, Zhu Hong, senior National Bureau of Statistics statistician, said in a statement on Friday.

The slump is the biggest since March 2020.

“In April, frequent Covid-19 outbreaks were widespread in some regions, creating big shocks to the production and operations of industrial firms and leading to a drop in their profits,” Zhu said.

While high bulk commodity prices drove up the profit growth of some upstream industries – with the mining sector soaring by 142 per cent – manufacturing firms saw their profits dive by 22.4 per cent.