China’s industrial profits contracted for a second consecutive month in November, reinforcing concerns that weak domestic demand and persistent deflation are weighing on corporate earnings and the broader economic recovery.
Industrial profits fell 13.1% year-on-year in November, accelerating from a 5.5% decline in October, according to data released by the National Bureau of Statistics on Saturday. The drop was sharper than expected, with Bloomberg Economics forecasting a 15% fall.
For the first 11 months of the year, industrial profits edged up just 0.1%, slowing from a 1.9% rise recorded in the January–October period, highlighting a loss of momentum towards the year-end. Economists cited soft household consumption, falling investment and ongoing factory-gate deflation as key drags, despite some resilience in exports, Reuters reported.
Manufacturing profits rose 5% over the first 11 months, supported by advanced industries such as aerospace and electronics, while utilities remained in growth territory. Mining companies, however, continued to post double-digit declines, with coal-related sectors among the worst hit.
The sharper contraction in November could further weigh on investment and hiring, analysts warned. However, policymakers have so far refrained from announcing fresh stimulus, as Beijing appears confident of meeting its annual growth target of around 5%.
Looking ahead, economists expect only modest monetary easing and limited fiscal expansion next year, even as calls grow for stronger measures to revive domestic demand.
(With Agency Inputs)
