PROFITS at China’s industrial firms slumped in the first two months of the year to their lowest in at least a decade, with the mining, manufacturing and power sectors all seeing sharp falls, as a virus epidemic battered China’s economy.

Profits earned by Chinese industrial firms in the first two months dropped 38.3 percent from a year earlier to 410.7 billion yuan (US$58.15 billion), worsening from a 6.3 percent fall seen in December last year, the National Bureau of Statistics (NBS) data showed. It marked the steepest decline in data going back to 2010.

The reading combines the results for January and February to exclude distortions caused by the Lunar New Year holidays.

The outbreak escalated just as many businesses were closing for the long holiday break in late January, and widespread restrictions on transportation and personal travel, as well as mass quarantine, delayed their reopening for weeks.

The decline in profits points to lingering trouble for the manufacturing sector, which is wrestling with fallout from the health crisis that has severely hurt output. Most analysts now expect a contraction in gross domestic product in the first quarter.

Industrial production and sales fell sharply amid epidemic control efforts, while the costs of labor and depreciation continued to put pressure on companies, a statistics bureau official said in a statement published alongside the data.

Profits for the automobiles, electrical equipment, chemicals and electronics industries saw some of the steepest declines, with those for the latter falling 87 percent.

Only four of the 41 industries surveyed saw profit increases: tobacco products, non-ferrous metals, oil and gas exploitation, and processing of non-staple agricultural goods. (SD-Agencies)