China’s industrial profit growth slowed to 4.2 per cent in August
On September 28, China’s statistics bureau reported that profit at large industrial firms rose 4.2 per cent from a year earlier in August, down from July’s 11.2 per cent increase. January–August profit was up 15.7 per cent on a comparable basis, a cumulative measure covering a different period. Mining and manufacturing gains helped lift the eight-month total, while profit in electricity, heat, gas and water supply fell. The figures show an uneven sector pattern beneath the overall gain.
Economics & Markets··Midday
August growth slowed to 4.2 per cent
China’s National Bureau of Statistics said profit at industrial firms above its designated revenue threshold grew 4.2 per cent from a year earlier in August. The annual increase had been 11.2 per cent in July. Across January–August, the covered firms earned 5.27198 trillion yuan in profit, up 15.7 per cent on a comparable basis from a year earlier. The single-month rate and cumulative eight-month rate measure different periods. The strong eight-month total therefore sits alongside a much slower August reading.[1], [2]
Manufacturing gained while utilities lost profit
In the eight-month breakdown, mining profit rose 35.1 per cent and manufacturing profit rose 17.4 per cent. Profit in electricity, heat, gas and water production and supply fell 12.0 per cent. Makers of computers, communications equipment and other electronics roughly doubled profit, while automobile manufacturing profit fell 16.0 per cent. Non-metallic mineral products recorded a 46.7 per cent decline. By ownership, state-controlled enterprises reported 1.67599 trillion yuan in profit and private firms 1.32132 trillion yuan. Their annual increases were 10.3 per cent and 10.4 per cent respectively. The aggregate increase thus covers sharply different industry and ownership results.[1]
Receivables and inventory remained large
The covered firms recorded 93.09 trillion yuan in January–August revenue and 79.19 trillion yuan in operating costs. Their profit margin on revenue reached 5.66 per cent, up 0.44 points from a year earlier. Accounts receivable stood at 29.48 trillion yuan at the end of August, and finished-goods inventory at 7.36 trillion yuan. Finished goods stayed in stock for 21.3 days on average. The statistics bureau says firms enter or leave its survey as they cross the revenue threshold, start operating or close. It calculates the 15.7 per cent growth rate on a comparable set of firms, so dividing two published annual totals may produce a different rate.[1]
