Industrial earnings bounce back in March

Workers at assembly lines at Fujian Jinjiang Sanli Engine, a company that specializes in businesses ranging from precision die casting and machinery to the production of motorcycles. The profits of State-owned and large non-State industrial enterprises picked up in March by 4.5 percent year-on-year. [Photo/China Daily]

Monthly figure rises 4.5% but overall picture remains gloomy

Rebounding industrial profits in March send a positive signal but the overall shrinking margins in the first quarter mean there is little cause for optimism, as the market still expects further policy support to restore confidence.

The profits of State-owned and large non-State industrial enterprises picked up in March by 4.5 percent year-on-year, after the figure declined for two consecutive months, according to a statement on the website of the National Bureau of Statistics on Friday.

But overall profits in the first quarter, which totaled 1.04 trillion yuan ($165 billion), were still 1.3 percent smaller compared with the same period last year.

He Ping, an official with the industry department of the NBS, attributed the overall decline in profits in the first quarter to pessimistic sales figures and rising costs caused by surging prices.

According to He, factory gate prices were up 19.8 billion yuan from January to March, while purchase prices surged by 121.4 billion yuan, which brought industrial profits down by 101.6 billion yuan.

The profit margin of 5.28 percent in the first quarter was slightly up from 5.02 percent in the first two months, but was still lower than the average of 6 percent last year.

The profit data were in line with an earlier release from the NBS, which showed that China's industrial output was growing at its slowest pace since July 2009, up 11.6 percent year-on-year in the first quarter of this year, compared with 20 percent a year ago.