Industrial profits improve in April

CHINA’S industrial profits improved in April as output and sales rebounded amid nationwide efforts to balance the coronavirus epidemic battle with economic development, data from the National Bureau of Statistics showed yesterday.

In April, industrial profits of designated large enterprises with annual turnover of at least 20 million yuan (US$2.86 million) totaled 478.1 billion yuan, down 4.3 percent from a year earlier.

This compares with a plunge of 34.9 percent in March.

In the first four months, industrial profits totaled 1.26 trillion yuan, down 27.4 percent from last year. However, that was 9.3 percentage points better than last month.

The contraction narrowed from the 36.7-percent decline in the first quarter, NBS data showed.

“The improvement in April was mainly attributed to increasing investment returns last month and a low comparison base last year,” said NBS statistician Zhu Hong.

The industrial sector was among the quickest to rebound from the impact of the virus, with the value-added industrial output returning to growth last month, the first expansion since the virus outbreak as factory activities recovered amid easing containment measures.

Both industrial output and sales recorded growth, with output growing 3.9 percent in April from a drop of 1.1 percent last month and a 13.5-percent slump seen in the first two months of the year, while sales increased 5.1 percent from a decline of 11.1 percent.

About 80 percent of surveyed industries improved in profits; while 23 industries achieved profit growth, compared with 15 industries with growing profits in March.

Of note, major industries such as automobiles, specialized equipment, electrical machinery and electronics recovered significantly, as demand greatly increased under government supportive policies.

In April, profits of automobile, specialized equipment, electrical machinery and electronics industries increased by 29.5 percent, 87.5 percent, 33.9 percent and 85.1 percent, respectively, contributing 19.7 percentage points of industrial profit growth in April.

High-tech manufacturing and strategic emerging industries also outperformed, with profit in high-tech manufacturing surging 55.7 percent last month, quickening from the 0.5-percent gain in March.

“Despite the recovery in April, the business profitability situation remains ‘not optimistic’ since the yet-to-recover market demand, retreating industrial prices and cost pressure would combine to weigh on profits,” said Zhu.

(Shanghai Daily/Xinhua)