China industrial profits jump 24.7% in April, fastest gain in over two years despite headwinds

BEIJING — China’s industrial profits surged by 24.7% in April from a year earlier, according to official data released Wednesday, despite broader signs of slowing economic momentum.

The increase marked the fastest growth since November 2023, according to financial data provider Wind Information, and accelerated from a 15.8% rise in March.

For the first four months of the year, industrial profits rose 18.2%, up from 15.5% growth in the first quarter. Computing and electronics equipment manufacturing, the largest sector by profit amount, saw earnings more than double from a year ago, although the pace slowed slightly in April from March on a year-to-date basis.

Among the ten largest sectors by profit, the oil and gas extraction industry posted an 8.1% rise in profits in the first four months of the year, reversing a 1.4% decline in the first quarter.

Higher crude prices helped lift profits in the petroleum processing industry to 40.42 billion yuan ($5.96 billion) in the January-April period, nearly double the 22.94 billion yuan recorded as of March.

Profits for automobile manufacturers fell 16.8% in the same period from a year earlier, improving from a 17.7% decline in the first quarter.

Beijing’s efforts to address excessive competition in the automobile and other sectors are starting to bear fruit, EU Chamber of Commerce of China President Jens Eskelund told reporters on Tuesday, citing a survey of members earlier in the year. But he cautioned it would take another year or two to confirm the trend.

A fivefold increase in profits in the mining and related sectors also boosted overall industrial profit growth, while iron smelting and rolling swung to a profit for the year as of April, compared with a loss in the first quarter.

However, profit declines in furniture manufacturing steepened to 54.4% for the first four months of the year, worse than the 44.9% recorded as of March.

“China’s industrial profit growth accelerated sharply in April, driven primarily by rising producer prices amid the global energy shock,” Hao Zhou, head of research and chief economist at Guotai Junan International.

“However, the improvement in profitability appears uneven and potentially fragile. Profit gains are concentrated in upstream and high-tech sectors, while many other industries continue to struggle,” he said in a note.

China reported slower economic growth in April, with a 4.1% increase in industrial output and a 0.2% rise in retail sales from a year ago. Fixed asset investment fell for the first four months of the year as the real estate drag steepened.

Exports remained strong, climbing 14.1% in April from a year ago in U.S. dollar terms. Imports surged by 25.3%, data released earlier in May showed.

The producer price index in April jumped 2.8% from a year ago, the most since July 2022.