BEIJING, Oct 27 (Reuters) – Profits at China’s industrial firms increased for a second consecutive month during September, indicating a stable economy as authorities implemented supportive policy measures.
The year-on-year growth of 11.9% was fueled by an unexpected 17.2% surge in August and followed robust industrial and consumption activity in September.
Data released by the National Bureau of Statistics (NBS) on Friday revealed that profits decreased by 9% in the first nine months compared to the previous year, which was a narrower decline compared to the 11.7% drop in the previous eight months.
Industrial profits improved on a quarter-on-quarter basis and experienced a 7.7% increase in the July-September period compared to the preceding two quarters, according to NBS statistician Yu Wenning’s accompanying statement.
The September figures reflect an overall enhancement in the operation of the domestic industrial sector and a sustained rebound in market demand, stated Zhou Maohua, an analyst at China Everbright Bank. He added that the year-on-year growth deceleration was a consequence of the high baseline set last year.
Zhou noted that the decline in producer prices last month indicated that certain industrial firms are still reducing prices to stimulate sales, which adversely affects overall industrial revenue and profits.
He projected that industrial profits are anticipated to continue improving in the upcoming months, partly due to the delayed impact of domestic macro pump-priming.
China’s blue chip CSI300 index (.CSI300) grew by 0.6% after initially falling during the morning session.
An array of recent data indicates stability in the world’s second-largest economy, which outperformed expectations in the third quarter following a temporary post-COVID surge. It expanded from.
Analysts point out that this stability can be attributed to a series of policy measures introduced over the past few months, although the persistent weakness in the distressed property sector continues to exert significant pressure on the economy and corporate earnings.
In the previous week, Chinese battery giant CATL (300750.SZ) reported a significant decline in third-quarter profit growth, marking its weakest quarter since the beginning of last year due to slowing demand and intense competition.
In his first policy comments following the release of third-quarter gross domestic product data, China’s central bank Governor Pan Gongsheng pledged to enhance the economic recovery by focusing on expanding domestic demand while mitigating financial risks.
An analysis of NBS data revealed an 11.5% decline in earnings for state-owned companies during the first nine months, a 10.5% decline for foreign companies, and a 3.2% decline for private sector companies.
The industrial profit data includes companies with annual revenues of at least 20 million yuan ($2.73 million) from their primary operations.
($1 = 7.3150 Chinese yuan)
Reporting by Qiaoyi Li and Ryan Wu; Editing by Jacqueline Wong
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