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Industrial profits climb at slower pace
By Wang Yanlin |
December 28, 2010, Tuesday
|
Print Edition
Print Edition
PROFITS of China's industrial companies continued to moderate in November on rising production costs and an uncertain future due to a restructuring in the manufacturing sector.
Net income of Chinese industrial firms jumped 49.4 percent from a year earlier to 3.88 trillion yuan (US$585 billion) in the first 11 months, slower than the pace of 51.6 percent through October, the National Bureau of Statistics said yesterday.
Of the 39 industries tracked, only petroleum refinery saw profit drop by 1.1 percent while all others experienced rising profits during January-November.
Chemical fiber producers took the lead with a 120-percent surge in profits while non-ferrous metal firms saw their net earnings jump 82.1 percent.
"China's industrial activities have regained traction in the past two months," said Li Maoyu, an analyst at Changjiang Securities Co. "But higher production costs and an unknown future as China restructures its economy have been eating into manufacturers' profits."
Li predicted the profit slowdown may end next year as the country shifts to domestic consumption to boost the economy.
The official Purchasing Managers' Index, a comprehensive forward-looking gauge of industrial activities, rose at the fastest rate in seven months to 55.2 percent last month. It indicated China's manufacturing sector has picked up its pace of expansion.
Similarly, China's industrial growth gained an annual 13.3 percent in November, 0.2 percentage point quicker than a month earlier.
But production costs continued to rise. The Producer Price Index, the factory-gate measurement of inflation, rose to 6.1 percent from a year ago to a 28-month high in November. The PPI rose 5 percent in October.
Net income of Chinese industrial firms jumped 49.4 percent from a year earlier to 3.88 trillion yuan (US$585 billion) in the first 11 months, slower than the pace of 51.6 percent through October, the National Bureau of Statistics said yesterday.
Of the 39 industries tracked, only petroleum refinery saw profit drop by 1.1 percent while all others experienced rising profits during January-November.
Chemical fiber producers took the lead with a 120-percent surge in profits while non-ferrous metal firms saw their net earnings jump 82.1 percent.
"China's industrial activities have regained traction in the past two months," said Li Maoyu, an analyst at Changjiang Securities Co. "But higher production costs and an unknown future as China restructures its economy have been eating into manufacturers' profits."
Li predicted the profit slowdown may end next year as the country shifts to domestic consumption to boost the economy.
The official Purchasing Managers' Index, a comprehensive forward-looking gauge of industrial activities, rose at the fastest rate in seven months to 55.2 percent last month. It indicated China's manufacturing sector has picked up its pace of expansion.
Similarly, China's industrial growth gained an annual 13.3 percent in November, 0.2 percentage point quicker than a month earlier.
But production costs continued to rise. The Producer Price Index, the factory-gate measurement of inflation, rose to 6.1 percent from a year ago to a 28-month high in November. The PPI rose 5 percent in October.
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