A large number of machinery and vehicles are ready for shipment at the dock of the Oriental Port Branch of Lianyungang Port in Lianyungang, China, on September 27, 2024.
Costfoto | Nurphoto | Getty Images
China’s industrial profits dropped by 10% in October from a year ago, in another sign that Beijing’s stimulus measures have yet to reverse a slump in corporate earnings.
That followed a 27.1% year-on-year decline in September, the steepest plunge since March 2020. Industrial profits are a key gauge of the financial health of factories, mines and utilities in China.
In the first ten months, profits at China’s industrial firms decreased by 4.3% from a year ago, the National Bureau of Statistics said in a statement Wednesday. That was compared with a fall of 3.5% in the first nine months.
Recent data indicates that Beijing’s latest stimulus measures have already helped some sectors of the economy, but not enough to offset persistent deflationary pressures.
China’s consumer price index in October rose slower than expected, edging up 0.3% from a year ago, marking the slowest rise since June. Meanwhile, producer price index fell 2.9% on year, showing that deflation deepened from the 2.8% drop in the prior month.
The country’s industrial production also grew slower than expected. Among fixed asset investment, real estate declined by 10.3% for the year through October, a sharper decline than the 10.1% seen in the period through September.
On the brighter side, October retail sales beat expectations with a 4.8% year-on-year growth, and the unemployment rate ticked lower to 5%, down from 5.1% in September.
The world’s second largest economy grew at its slowest pace in the third quarter since early 2023, as it grappled with lackluster domestic consumption and a prolonged housing downturn.
Since late September, Chinese authorities have ramped up stimulus announcements to prop up the faltering economy and achieve the government’s growth target of “around 5%.”
China is scheduled to release its official manufacturing purchasing managers’ index for November on Saturday. The official PMI is expected to come in at 50.3, according to a Reuters poll of economists, a slightly larger expansion than 50.1 in October.
A reading above 50 indicates expansion in activity while one below that level suggests a contraction.
— CNBC’s Evelyn Cheng contributed to this report.
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