Earnings growth for industrial firms in China slowed for the fourth consecutive month, as higher raw material prices squeezed factory margins, suggesting some weakness in the world’s second-largest economy’s recovery.
Profits of industrial firms rose 20% year on year in June to 791.8 billion yuan ($122.27 billion), according to data from the National Statistics Office, compared with a 36.4 percent increase in May.
In the first half of the year, industrial companies’ profits grew 66.9%, compared to a sharp decline due to the pandemic a year ago.
Profits increased 45.5% in the period from January to June compared to the same period in 2019, before the pandemic.
The Chinese economy grew slightly slower than expected in the second quarter of the year. Officials warn that the recovery is not steady.
Industrial corporate debt rose 8.5% on an annual basis at the end of June, compared to an increase of 8.2% at the end of May.
The data covers major industrial companies whose annual revenue from main activities exceeds 20 million yuan.