Investing.com – Profit growth at Chinese industrial firms in the first two months of the year was slower than 2017’s average growth, data from China’s National Bureau of Statistics (NBS) showed on Tuesday.
Industrial companies with annual earnings of more than 20 million yuan reported profits of 968.9 billion yuan in January and February, which represented a 16.1% increase from a year earlier, the NBS said in a statement. This is compared to an increase of 31.5% recorded in the first two months of 2017.
Meanwhile, the reading was 5.3% higher than the growth recorded in December, with non-metal minerals, petroleum, natural gas, heating and pharmaceuticals cited as the fastest-growing sectors.
David Qu, a Shanghai-based analyst at ANZ, said the growth rate was “still a good number.”
"We believe it's highly likely that industrial profits will achieve double-digit growth for the rest of the year despite price slowdown."
NBS statistician He Ping echoed Qu’s comments, while attributing the profit growth to improved profitability and reduced costs.
"While industrial profits maintained rapid growth, improvements were made in efficiency and profitability," he said.
The government releases combined January and February figures in order to smooth out distortions caused by the Lunar New Year holidays, which began in mid-February this year but late January last year.
Tuesday's data also showed Chinese industrial firms' liabilities jumped 6.0% as of the end of February from the same period last year to 59.6 trillion yuan, compared with a 5.7% rise as of the end of 2017.