3.3% reduction in total industrial profits in 2019 structural improvement

According to the data released by the National Bureau of statistics on March 3, in 2019, the total profits of Industrial Enterprises above Designated Size nationwide reached 6199.55 billion yuan, down 3.3% over the previous year. Zhu Hong, Senior Statistician of the industry department of the National Bureau of statistics, said that in 2019, in the face of a complex environment with significantly increased risks and challenges at home and abroad, the supply side structural reform was solidly promoted in the national industrial economic front, industrial sales achieved growth, and the structural improvement of efficiency was achieved.

Zhu Hong said that the profit decline of Industrial Enterprises above Designated Size in 2019 was mainly affected by the following factors: First, the growth rate of industrial product sales fell. In 2019, the operating revenue of Industrial Enterprises above designated size increased by 3.8%, and the growth rate was 4.8 percentage points lower than that of the previous year. Second, rising costs squeeze profit margins. In 2019, the cost per hundred yuan of operating revenue of Industrial Enterprises above designated size was 84.08 yuan, an increase of 0.18 yuan over the previous year, mainly due to the increase of raw materials and labor costs. Third, the profit of key industries such as steel, petrochemical, automobile, etc. decreased significantly. Fourth, individual industries and enterprises have made significant provision for asset impairment losses. "Although the profit of industrial enterprises has declined in 2019, the benefit situation shows structural improvement."

First, the profits of high-tech manufacturing and strategic emerging industries kept growing. In 2019, the profits of high-tech manufacturing and strategic emerging industries increased by 4.8% and 3.0% respectively compared with the previous year, which was significantly better than the average level of industries above scale; the profits of high-tech manufacturing and strategic emerging industries accounted for 1.2 and 1.6 percentage points higher than the previous year respectively. Second, the profits of private enterprises and small enterprises kept growing. In recent years, the state has introduced a series of policies and measures to promote the development of small and micro enterprises of private enterprises, such as tax reduction and fee reduction, streamlining administration and decentralization, innovation support and financial support, which has created a good environment for the development of small and micro enterprises of private enterprises. In 2019, the profits of private enterprises and small enterprises increased by 2.2% and 5.0% respectively, showing a steady growth trend.

Third, there are many industries with sustained profit growth. In 2019, profits of 28 industries in 41 industries increased over the previous year, accounting for more than 60%. Among them, the profit growth rate of nine industries exceeded double digits, and the profit of power and heat production and supply industry, electrical machinery and equipment manufacturing industry, special equipment manufacturing industry, wine and beverage manufacturing industry and refined tea manufacturing industry increased by 19.0%, 10.8%, 12.9% and 10.2% respectively over the previous year. In total, these four industries boosted the profits of Industrial Enterprises above Designated Size by 2.3 percentage points over the previous year. In addition, the profit growth rate of building materials, pharmaceutical manufacturing, food manufacturing and other industries is also between 5% and 10%.