Industrial profit increased by 5.4% year on year

According to the financial data of industrial enterprises released by the National Bureau of statistics on December 27, in November 2019, the total profits of Industrial Enterprises above designated size increased by 5.4% year on year, and the growth rate changed from negative to positive (down 9.9% in October). The cumulative profit from January to November decreased by 2.1% year on year, 0.8 percentage points lower than that from January to October. In this regard, Zhu Hong, Senior Statistician of the industrial department of the National Bureau of statistics, made the following interpretation.

The main reason why the profit growth rate of industrial enterprises changed from negative to positive in November is that the growth of industrial production and sales accelerated significantly. In November, the added value of industries above designated size increased by 6.2% on a year-on-year basis, 1.5% faster than that in October; the operating revenue of industrial enterprises increased by 5.3% on a year-on-year basis, 3.8% faster than that in October. The expansion of production scale of the enterprise has brought about an increase in profits. Second, the factory price of industrial products decreased. In November, the ex factory price of industrial producers decreased by 1.4% year on year, 0.2% lower than that in October; the purchase price of industrial producers decreased by 2.2% year on year, 0.1% higher than that in October. According to preliminary calculation, the profit growth rate of Industrial Enterprises above the full scale affected by the price change of industrial products in November is 4.0 percentage points higher than that in October.

The profit growth of consumer goods manufacturing industry accelerated in November, with a year-on-year growth of 8.2% and a growth rate of 3.1 percentage points higher than that in October. Among them, the profit of food manufacturing industry increased by 32.5%, down 10.9% in October; the profit of papermaking and paper products industry increased by 66.1%, up 54.3 percentage points faster than that in October; the profit of textile industry decreased by 11.4%, down 20.5 percentage points.

The profits of key industries such as petrochemicals and iron and steel recovered significantly in November, mainly affected by factors such as the recovery of market demand and the rise of product prices. The sales growth of chemical industry, petroleum processing and iron and steel industry accelerated, and the profit growth recovered. In November, the profits of chemical raw materials and chemical products manufacturing industry decreased by 0.2% year-on-year, a sharp decrease of 151.5 percentage points compared with that in October; the profits of petroleum, coal and other fuel processing industry increased by 45.5%, a decrease of 31.2% in October; the profits of ferrous metal smelting and rolling processing industry decreased by 16.3%, a decrease of 48.0 percentage points.

The profit growth of private enterprises and small enterprises accelerated in November. The profit growth of private enterprises and small enterprises increased by 14.7% and 8.6% year-on-year respectively, 9.9 and 5.6 percentage points higher than that of October.

In November, the profit growth of state-owned holding enterprises and foreign, Hong Kong, Macao and Taiwan invested enterprises turned from negative to positive. The profit growth of state-owned holding enterprises increased by 0.6% year-on-year, reversing the downward trend since the second half of this year. The profit growth of foreign, Hong Kong, Macao and Taiwan invested enterprises increased by 3.5% year-on-year, and fell by 2.0% in October. Although the growth rate of industrial enterprises' profits changed from negative to positive in November, we should also see that the current downward pressure on the economy is still large, and the volatility and uncertainty of industrial enterprises' profits still exist due to market demand, industrial prices and other multiple factors.