Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

China's industrial profits up 1.1% in May as sales quicken

Economic IndicatorsJun 27, 2019 03:36
Saved. See Saved Items.
This article has already been saved in your Saved Items

BEIJING (Reuters) - Bolstered by improving sales, profits for China's industrial companies rose in May after shrinking the previous month, bucking a months-long downtrend, official data showed on Thursday.

Industrial profits rose 1.1% in May from a year earlier to 565.6 billion yuan (64.78 billion pounds), according to data released by the National Bureau of Statistics (NBS), following a 3.7% fall in April.

In the first five months, industrial firms earned profits of 2.38 trillion yuan, down 2.3% from a year earlier, compared with a 3.4% drop in January-April.

The uptick in May was driven by quicker sales and slower increases in corporate costs, Zhu Hong of the statistics bureau said in a statement accompanying the data, adding that better margins in equipment manufacturing and the coal sector attributed to the bulk of the increase.

Moreover, profits in high-tech manufacturing and emerging industries both turned positive after declining the month before.

China's industrial profits have been faltering since the second half of 2018 as the economy slowed and producer prices weakened. The escalating U.S.-China trade war and cooling global demand have added to the pressure, with both sides announcing in May they were hiking tariffs on each others' goods and Washington threatening even more.

Producer price inflation, one gauge of industrial profitability, slowed to 0.6% in May, while industrial output growth unexpectedly cooled to a 17-year low of 5%.

To support the economy and spur domestic demand, policymakers have stepped up approvals for big infrastructure projects, freed up more funds for lending and cut taxes. The People's Bank of China (PBOC) has slashed banks' reserve requirement ratios six times since early 2018, with further cuts expected in coming months.

The biggest share of profits was still dominated by upstream sectors in January-May, seeing faster growth.

China's crude steel output hit a record high in May, even as a jump in prices of raw materials, particularly iron ore, cut into mills' profit margins.

Steel demand from downstream sectors in China has turned "very strong", Singapore-based data analytics company Tivlon Technologies said this week.

But a continued crackdown on air pollution has weighed on smokestack industries. The country's top steelmaking city of Tangshan last week summoned 48 companies and ordered them to trim output to reduce smog.

Profits at China's state-owned industrial firms were down 9.7% on an annual basis for the first five months, according to the statistics bureau.

Liabilities of industrial firms rose 5.3% year-on-year as of end-May versus a 5.5% increase by end-April.

China's industrial profits up 1.1% in May as sales quicken

Related Articles

UK crisp shortage continues at many shops - ONS
UK crisp shortage continues at many shops - ONS By Reuters - Dec 02, 2021

LONDON (Reuters) - Packets of crisps remain in short supply at many British shops following production problems at Walkers, a major supplier of the snacks, weekly figures from...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email