GROWTH in China’s industrial companies’ profits slowed last month as the economy cooled, costs rose and prices fell on moderating demand and overcapacity.

    Net income increased 6.3 percent from a year earlier to 502.4 billion yuan (US$82 billion), the National Bureau of Statistics (NBS) said Saturday, down from a 15.5 percent pace in May.

    Profits from main business operations fell 2.3 percent after an 8.8 percent gain the previous month, the bureau said.

    Industrial companies’ profits in the first six months of the year rose 11.1 percent to 2.58 trillion yuan, down from a 12.3 percent gain in the January-May period, and sales rose 11.4 percent to 47.8 trillion yuan, the data showed.

    Profits from main business operations, a measure the statistics bureau started releasing last month, rose 7.2 percent in the first six months, slowing from an 11.4 percent pace in the January-May period.

    The report covers companies with annual sales of 20 million yuan and above in 41 industry categories. Among those, 30 reported higher profits and one showed a loss, the NBS said.

    The moderation in profit growth was due to a slowdown in sales gains, higher raw-material costs and a high comparative base in June last year, statistics bureau official He Ping said in an analysis of the data posted on the bureau’s Web site.

    Profits in coal extraction and washing slumped 43 percent in the first six months, the report showed, as prices slumped and output declined. Earnings in non-ferrous metals extraction, including copper, aluminum and lead, fell 9 percent, while non-ferrous metals smelting and processing dropped 14.5 percent.

    First-half profits in agriculture and food processing rose 21 percent, textiles increased 19 percent and auto manufacturing climbed 20 percent, the data show.

    The figures come after the HSBC/Markit flash purchasing managers index, the earliest indicator of China’s industrial activity, showing activity slowed to an 11-month low in July as new orders faltered and the job market darkened.

    China’s economy grew 7.5 percent in April-June from a year earlier, the ninth quarter of slowdown in the past 10 quarters.(SD-Agencies)