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Industrial production and sales quickly resumed

On October 27th the National Bureau of Statistics released data on the efficiency of industrial enterprises above designated size. Data show that from January to September, the total profits of industrial enterprises above the national scale reached 4366.05 billion yuan, down 2.4% from the same period last year, a 2.0 percentage point narrower than that from January to August. Among them, the profit in the third quarter increased 15.9%, 11.1 percentage points faster than the second quarter.
Zhu Hong, senior statistician at the Industry Department of the National Bureau of Statistics, said that industrial enterprises' production and sales have recovered rapidly, benefiting from the coordinated promotion of epidemic prevention and control and economic and social development. In the third quarter, the value added of industries above designated size increased by 5.8% year on year and the operating income increased by 4.8%, both showing a trend of recovery quarter by quarter. Driven by the steady recovery of revenue, the growth rate of industrial enterprises' profits dropped from 36.7% in the first quarter to 4.8% in the second quarter, and then picked up to 15.9% in the third quarter, showing a trend of upward shift from decline and accelerating growth.
On the one hand, the increase in the profit of the industry, the key industry pull obvious. In the third quarter, profits in 31 of the 41 industrial sectors increased year on year, six more than in the second quarter. Automobile manufacturing growth 53.8%, non-ferrous metal smelting and rolling processing industry grows 52.0%, black metal smelting and rolling processing industry grows 39.1%, general equipment manufacturing growth 32.4%, electricity, heat production and supply industry grows 22.4%, electrical machinery and equipment manufacturing industry increased by 16.8%, total pulling industrial enterprises above designated size profits rose 10.0% year-on-year in the third quarter.
On the other hand, unit costs have fallen and profitability has improved. In the third quarter, the cost per 100 yuan of operating income of industrial enterprises above a certain scale fell by 0.71 yuan compared with the second quarter and by 0.53 yuan compared with the same period last year, effectively relieving the pressure brought by the sharp rise in costs in the first half of the year. At the same time, the operating profit margin of industrial enterprises above designated size increased by 0.64 percentage points year on year in the third quarter, increasing further.
It is worth noting that the profits of major industrial sectors maintained double-digit growth in the third quarter. The profit of the equipment manufacturing industry increased by 22.5% year on year, boosting the profit of industrial enterprises above designated size by 7.8 percentage points. Among them, thanks to policy support such as the switch of environmental standards, accelerated infrastructure projects and consumption promotion, the profit of industries such as automobiles, general equipment and special-purpose equipment recovered first in the second quarter, and maintained rapid growth of more than 20% in the third quarter.
"With the gradual recovery of investment and consumer demand, the profits of oil, steel, automobile and other industries have been quickly repaired, and the profits of large enterprises have recovered significantly." Profits at large and medium-sized enterprises rose 16.0 per cent year-on-year in the third quarter, up 14.7 percentage points from the second quarter, Mr Zhu said. In addition, the profits of small and medium-sized enterprises rose 15.8 percent year-on-year in the third quarter, 1.7 percentage points faster than the second quarter, thanks to a number of policy supports.
Data showed that in September, the profits of industrial enterprises of large scale and above increased by 10.1% year on year, still maintaining double-digit growth, and the growth rate was 9.0 percentage points lower than that in August. According to Zhu Hong, this is mainly affected by three factors. First, changes in the price of industrial products have squeezed the profit space. In September, changes in the factory gate price and purchase price of industrial products had a significantly weaker driving effect on profit growth than those in August. Second, the increase of expenses and the substantial provision of asset impairment losses in some industries and enterprises have a certain impact on the growth of profits; Third, due to the rising cost of raw materials, sales and r&d expenses, the growth rate of profits in major industries such as electronics and automobiles slowed down in September.
"Although the profits of industrial enterprises continued to recover steadily in the first three quarters, the current growth rate of accumulative industrial enterprises' operating income and profits has not yet turned positive, accounts receivable and finished goods inventory are still growing at a high rate, and the foundation for the sustainable development of corporate profits still needs to be consolidated." Zhu hong believes that the next step should be to further stimulate the vitality of market entities in accordance with the requirements of promoting high-quality development and building a new development pattern, and strive to solve the production and operation difficulties of enterprises, so as to promote the sustainable and stable development of the industrial economy. (Reporter Xiong Li)
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