Home Business China’s industrial profits have steepest fall in eight years Business China’s industrial profits have steepest fall in eight years By viralevo November 27, 2019 Facebook WhatsApp Twitter Telegram LINE Viber Pinterest REUTERSPIX BEIJING: Profits at China’s industrial firms shrank at their fastest pace in eight months in October, tracking sustained drops in producer prices and exports and underscoring slowing momentum in the world’s second-largest economy. Industrial profits fell 9.9% in October year-on-year to 427.56 billion yuan (RM254 billion), data released by the National Bureau of Statistics showed today, marking the biggest drop since January-February period and compared with a 5.3% decline in September. China’s industrial sector has been under pressure in recent months as slowing demand at home and the fallout from the Sino-US trade dispute undercut earnings. “The big drop in October profits suggests the real economy is still facing plenty of difficulties,” said Nie Wen, economist at Shanghai-based Hwabao Trust, adding that the country’s industrial firms now face a double whammy of falling prices and higher funding costs. “Profit growth is expected to stay negative for a period of time in the future, likely prompting authorities to unveil more growth-boosting measures in a gradual and restrained way.” Profit declines for the manufacturing sector deepened in October, as margins contracted by 4.9% in the January-October period, compared with a 3.9% drop in the first nine months of the year. Meanwhile, mining sector profit growth also moderated. For January-October, industrial firms’ profits fell 2.9% from a year earlier to 5.02 trillion yuan, compared with a 2.1% decline in January September. China’s producer price index, seen as key indicator of corporate profitability, posted its sharpest fall in more than three years in October as prices for raw materials weakened. The country’s official manufacturing PM also showed a contraction in activity for the sixth straight month in September with new export orders falling for their 17th straight month. China’s exports fell in annual terms for the third straight in October, albeit at a slower-than-expected rate. “We expect industrial profit growth to remain sluggish, given the deteriorating growth outlook and elevated uncertainty amid the US-China trade conflict,” said Nomura analysts in a note to clients after the data release. Industrial firms’ liabilities increased 4.9% from a year earlier to 66.74 trillion yuan at end-October, compared with a 5.4% increase at end-September. Private sector profits rose 5.3% in January-October, slowing from 5.4% for January-September. The data covers firms with more than 20 million yuan in annual revenue from their main operations. – Reuters Sourcethesundaily.my Facebook WhatsApp Twitter Telegram LINE Viber Pinterest Previous articleReal Madrid find themselves on night of comebacks against PSGNext articleEat Well: Awesome oats RELATED ARTICLES Business How much money does the world owe China? viralevo China has been rapidly rolling out its Belt and Road Initiative to build new roads, ports and rail lines in mostly developing nations, extending... Read more Business New weekly figures show almost 40 million people lost their job since the pandemic. viralevo Another 2.44 million Americans filed for initial unemployment benefits last week, bringing the total number of people who lost their job so far during... Read more Business Asia shares dragged higher by S&P 500, oil and gold jump viralevo NEW YORK (Reuters) - A gauge of global equity markets surged almost 3% on Monday and oil rallied to highs last seen in mid-April... Read more - Advertisment - Must Read World Trump threatens White House protesters with ‘vicious dogs and most ominous... viralevo Related video: Protests erupt across US cities in wake of George Floyd killing Donald Trump has threatened people protesting the death of George Floyd with "vicious dogs" and... Black Lives Matter protesters take to the streets of London S’poreans, 21 & above, getting 2nd S$300-S$600 payout in June 2020 How much money does the world owe China?