Workers are busy at the factory of a manufacturing company in Shijiazhuang, north China's Hebei Province, Oct. 19, 2020. (Photo by Liang Zidong/Xinhua)

Total profit of industrial companies above designated scale in China in the first nine months of the year dropped 2.4 percent year-on-year, according to the National Bureau of Statistics (NBS) on Tuesday, narrowing 2 percentage points from the decline during the January to August period. 

According to the NBS, the profit of designated industrial companies increased 10.1 percent year-on-year in September, down from a growth of 19.1 percent from the previous month.

The growth was driven by several key industries, including automobile manufacture and metal processing, which grew 53.8 percent and 52 percent in the second quarter respectivcely, compared to the previous one. Six key industries contributed 10 percentage points to the industrial profits in the third quarter. 

According to Zhu Hong, a senior analyst from the NBS, the profits of large companies were driven by a recovery of demand for investment and consumption, especially in sectors such as crude oil, steel and automobiles. 

However, despite rapidly recovering profits, the growth was still negative in the first nine months of the year. According to Zhu, the negative growth was due to elevated costs in inventory and logistics.

"The rising cost of raw materials, sales as well as research and development are still weighing on the industrial profit, dragging the growth down in September," Zhu said.

Global Times


Newspaper headline: Profit decline in China's industrial enterprises narrows