Industrial company profits improved in May
BEIJING: Profits at China’s major industrial companies fell at a slower pace in May as factories in the world’s second-largest economy resumed production and the business climate improved, official data showed on Monday.
Large industrial companies with revenues of at least 20 million yuan (about $2.99 million) saw their collective profit fall 6.5% year-on-year last month, an improvement from the fall of 8.5% in April, according to figures from the National Bureau of Statistics (BNS).
Their earnings jumped 6.8% in May from a year earlier, faster than the figure recorded the previous month.
SNB senior statistician Zhu Hong attributed the slower decline in profits to effective Covid-19 controls, a rebound in business activities and smoother logistics.
In the first five months of 2022, major industrial enterprises made about 3.44 trillion yuan in total, up 1 percent from a year ago.
Of the country’s 41 industry sectors, 20 reported annual profit growth or a tighter year-on-year profit contraction in May, while five managed to reverse their downward trend towards post expansion. -profit.
Last month, the country’s northeastern region and the Yangtze River Delta, where the megacity of Shanghai is located, reported a drop in industrial profits much smaller than in April, as these regions gradually shed the impact of the Covid-19 epidemic.
Boosted by political support and relatively high prices, the energy sector saw its profits jump in May. Profits in the coal, petroleum and natural gas mining industries more than doubled, contributing 9.5% to overall industrial profit growth last month.
Marginal profits in the equipment manufacturing sector improved from April, and better profits were also reported among producers of consumer goods last month.
Despite the positive news, Zhu warned that given the relatively weak recovery base and the ever-changing external landscape, uncertainties still abound for industrial companies.
China’s leading economic indicators improved in May. One of them, value-added industrial production, reversed its decline in April and posted a year-on-year expansion last month.
To support the economy, the State Council recently unveiled a set of 33 measures aimed at further stabilizing the economy.
The Ministry of Industry pledged to focus on stabilizing industrial chains and strengthen support for small and medium enterprises to ensure the implementation of the policy package.
Building on May’s momentum, Chinese industrial firms are likely to post better profits in June, said Zheng Houcheng, director of the Yingda Securities Research Institute.