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Profit growth in Chinese industrial firms ease in Oct
By Wang Yanlin |
November 26, 2010, Friday
|
Online Edition
Online Edition
CHINA'S industrial companies reported a slower profit growth last month, reflecting higher production costs and due to the effect of government orders to save energy at the year end.
Net earnings of Chinese manufacturing companies expanded 51.6 percent from a year earlier to 2.83 trillion yuan (US$421 billion) through October, the National Bureau of Statistics said today.
The pace moderated from the jump of 53.5 percent in the first three quarters and 55 percent through August.
Among the 39 industries tracked by the bureau, 37 said their profits managed to grow on an annual basis, one unidentified industry returned to black and only the petroleum refinery sector reported an 8.2 percent fall in profit from a year earlier.
Compared with the first nine months of this year, 24 industries said the pace of their profit growth slowed down.
"Higher production costs are the major reason," said Li Maoyu, an analyst at Changjiang Securities Co. "Manufacturers have to prepare more funds for buying raw materials nowadays and the trend will be extended into at least the first half of next year."
China's Producer Price Index, the factory-gate measure of inflation, swelled 5 percent year-on-year in October, picking up from the increase of 4.3 percent a month earlier.
Prices of raw materials, fuel and power rose 9.8 percent from a year earlier in the first nine months, challenging the stable growth of China's industrial sector.
Zhu Hongren, a spokesman at the Ministry of Industry and Information Technology, said last month higher productions costs, coupled with a rapidly appreciating yuan, has become a threat to many Chinese industries, especially those export-oriented ones.
Industrial manufacturers also face higher costs in labor, land use, financing and saving energy, and these variables make it difficult for the sector to develop in a stable manner, Zhu said.
Corporate profitability has been declining since the second quarter.
Net earnings of Chinese manufacturing companies expanded 51.6 percent from a year earlier to 2.83 trillion yuan (US$421 billion) through October, the National Bureau of Statistics said today.
The pace moderated from the jump of 53.5 percent in the first three quarters and 55 percent through August.
Among the 39 industries tracked by the bureau, 37 said their profits managed to grow on an annual basis, one unidentified industry returned to black and only the petroleum refinery sector reported an 8.2 percent fall in profit from a year earlier.
Compared with the first nine months of this year, 24 industries said the pace of their profit growth slowed down.
"Higher production costs are the major reason," said Li Maoyu, an analyst at Changjiang Securities Co. "Manufacturers have to prepare more funds for buying raw materials nowadays and the trend will be extended into at least the first half of next year."
China's Producer Price Index, the factory-gate measure of inflation, swelled 5 percent year-on-year in October, picking up from the increase of 4.3 percent a month earlier.
Prices of raw materials, fuel and power rose 9.8 percent from a year earlier in the first nine months, challenging the stable growth of China's industrial sector.
Zhu Hongren, a spokesman at the Ministry of Industry and Information Technology, said last month higher productions costs, coupled with a rapidly appreciating yuan, has become a threat to many Chinese industries, especially those export-oriented ones.
Industrial manufacturers also face higher costs in labor, land use, financing and saving energy, and these variables make it difficult for the sector to develop in a stable manner, Zhu said.
Corporate profitability has been declining since the second quarter.
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