Profits at China’s industrial firms grew at a much slower rate in Nov., pushed by plunging prices of raw materials, a weakening property market, and weaker consumer demand.
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Profits increased 9.0% on-year in November to 805.96 billion yuan ($126.54billion), way above the 24.6% gain posted in October.
For the January-November period, industrial firms’ earnings increased 38.0% year-on-year to 7.98 trillion yuan, much slower than the 42.2% increase in the first ten months of 2021.
Zhu Hong, the senior statistician at NBS, stated that even though state efforts to ease off rising wholesale prices in November reduced cost pressure on downstream industries, the limits implied the contribution from the mining and raw material industries weakened the growth of overall profits.
Zhu further stated that companies still face huge cost pressures, and the improvement in profits for downstream industries needs to be consolidated.
China’s red-hot factory-gate inflation slowed down slightly in November attributable to the government crackdown, rising commodity prices, and an easing power shortage.