BEIJING (Reuters) – Profits at Chinese industrial firms fell 6.7% in July from a year earlier, extending this year’s decline for the seventh month, as weak demand pressures companies as the post-pandemic recovery stalls in the world’s second-largest economy.
Data from the National Bureau of Statistics on Sunday showed that profits contracted 15.5% year-on-year during the first seven months, after a 16.8% drop in the first half of the year.
Earnings fell 8.3% in June, according to the bureau, which only publishes monthly figures now and then.
“Commodity prices are falling, and the pressure on raw material costs in middle and downstream industries has eased. The unit cost of industrial enterprises has generally improved,” Sun Xiao, a statistician with the National Bureau of Statistics, said in an accompanying statement, adding that unit costs in July were higher. her level. The first year-on-year decline since the beginning of the year.
Major Chinese manufacturers incurred losses in the first half, with Chinese engineering firm China Aluminum International reporting a net loss of 830.6 million yuan ($114.2 million), compared to a net profit of 123.6 million yuan a year earlier.
Major banks cut their growth forecasts for this year to below the government’s target of around 5% as the recovery stalled due to a worsening housing decline, weak consumer spending and sluggish credit growth, prompting authorities to cut rates and promise more support.
Detailed data showed that state-owned companies saw their profits decline by 20.3% in the first seven months of this year, foreign companies recorded a decrease of 12.4%, and private sector companies recorded a decrease of 10.7%.
Profits of 28 of 41 major industrial sectors declined during the period, with ferrous metal smelting and rolling mill manufacturing posting the deepest declines of 90.5%.
The central bank said this month that it would maintain its “rigorous and robust” policy to support the recovery. It remains to be seen whether more significant measures will be taken to support growth.
On Tuesday, President Xi Jinping told a forum in South Africa that the economy is resilient and the fundamentals of long-term growth remain unchanged.
The industry profit figures cover companies with annual revenue of at least 20 million yuan ($2.77 million) from their main operations.
($1 = 7.2761 CNY)
(Reporting by Ethan Wang, Judy Hua and Joe Cash; Editing by William Mallard)