Profits at China’s industrial firms grew robustly in November for a seventh month of gains. Supported by strong industrial production and sales, as manufacturers continue their recovery from the COVID-19 downturn.
Profits at Chinese industrial firms rose 15.5% from a year earlier to 729.32 billion yuan ($111.50 billion). Which is easing from October’s three-year high 28.2%, data from National Bureau of Statistics showed on Sunday.
China’s industrial sector has seen a powerful rebound from the shock of the COVID-19 pandemic, aided by a surprising export comeback as factories work up to satisfy demand overseas. Factory-gate prices, a gauge for profitability, fell but expected last month.
The pullback of growth in November was mainly because of a better base a year earlier, said Zhu Hong, a senior statistician at the statistics bureau.
“Profits in some traditional industries have shown improvement. With the approach of the heating season, demand for thermal coal has risen and costs have increased, resulting in an accelerated recovery within the coal sector,” Zhu said during a statement.
Coal industry profits rose 9.1% in November, the primary increase this year.
“We expect industrial profits to take care of double-digit growth over the following few months, which is driven by low base effects, domestic economic recovery. Not forgetting improvements in overseas demand and therefore the rebound in commodity prices benefiting the upstream sector,” said analyst Zhou Maohua at China Everbright Bank.
For the January-November period, industrial firms’ profits rose 2.4% from a year earlier. Which is accelerating from the 0.7% gain recorded for the primary 10 months.
Earnings at China’s state-owned industrial firms were down 4.9% for January-November. This is narrowing from the 7.5% decline within the first 10 months.
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