Arabic version: تباطؤ نمو الأرباح الصناعية في الصين خلال يوليو
According to Cnbc, China’s industrial profits rose 11.2% in July from a year earlier, the weakest pace this year, as soft demand and a broader economic slowdown weighed on manufacturers. Profit growth for the first seven months reached 17.6% from a year earlier, down from 18.7% growth recorded in the first half-year.
The figures nevertheless extend a turnaround in industrial corporate profitability. Profits had declined for years since 2021 and were barely positive last year, before moving to double-digit growth this year. Demand tied to the global artificial intelligence boom supported computing and electronics equipment manufacturing.
Profits in the integrated circuit industry, led by computing and storage chip manufacturers, expanded 18.5% in the January-to-July period from a year earlier. The sector contributed more than 80% of profit gains across electronics, according to the official release. A more than fivefold rise in optical fiber manufacturing profits also supported advanced-manufacturing gains.
Raw-materials manufacturers posted profit growth of 55.2% as of the end of July. Petroleum processing turned a profit over the seven-month period after supply disruptions in the Middle East lifted prices for downstream chemical products. Tianchen Xu, senior economist at Economist Intelligence Unit, said decelerating growth was primarily dragged down by falling investment in property and infrastructure, reflected in worsening profits in the steel and cement industries.
Consumer-facing industries remained under pressure. Furniture manufacturing profit declines deepened to 58.2% in the first seven months, compared with 52.7% as of June. Factory-gate inflation slowed to a three-month low of 3.5% in July, while real export growth slowed to 5.5% from 11.6% in June. Sophie Altermatt, economist at Julius Baer, said faster deployment of fiscal resources and possible additional easing could provide near-term stabilization, though a strong cyclical rebound remains unlikely.
