CHINA’S November industrial profits posted double-digit gains as overall manufacturing improved, thanks to a raft of stimulus measures aimed at reinvigorating the economy.

Profits jumped 29.5% from a year earlier, sharply accelerating from the previous month’s compared with October’s 2.7% expansion, marking the fourth month of year-over-year increase, said the National Bureau of Statistics (NBS).

In the first 11 months of 2023, industrial earnings shrank 4.4% from a year earlier, further narrowing from a 7.8% decline in January to October, the statistics bureau said.

There is now little chance industrial profits return to growth for the whole of 2023 with China’s producers’ prices expected to remain under pressure for the foreseeable future, said Zheng Houcheng, chief macroeconomist at Yingda Securities.

Behind the November profit rise was an accelerated uptick in industrial profits and returns on investments over the month, NBS statistician Yu Weining said in an accompanying statement.

The NBS said State, private and foreign industrial companies reported improved profitability in November thanks to government policies.

Private firms’ profit grew 1.6% in the January-November period, marking an expansion for the first time this year. But State-owned firms saw their earnings down 6.2% in the first 11 months, foreign firms reported an 8.7% fall, according to a breakdown of the data.

“As macro policies take effect and domestic demand gradually recovers, the rebound in industrial production picked up and industrial firms’ profit continued to improve,” Yu said in the statement.

With a slew of pro-growth measures in place to buttress a post-COVID recovery, Asia’s biggest economy is widely expected to achieve the government’s growth target of around 5% for this year.

The rise in both industrial output and earnings for November reflected the continued improvement in the manufacturing sector overall, said Zhou Maohua, an analyst at China Everbright Bank.

Macro policies to bail out industrial firms, a low statistical base last year and seasonality also contributed to the uptrend, he said.

Officials are confident about more favorable economic conditions in 2024.

While the overall manufacturing sector has shown improvement, not all segments are on the mend yet.

The unevenness across industrial sectors is evident, with high-tech and equipment manufacturers seeing rapid profit growth while property sectors are still squeezed by shrinking profits, Zhou said. (SD-Agencies)