In the first 10 months, the growth rate of industrial profits turned positive for the first time, with more than 60percent of industrial profits increasing

category:Finance
 In the first 10 months, the growth rate of industrial profits turned positive for the first time, with more than 60percent of industrial profits increasing


According to the data, from January to October, among the 41 major industries, 36 industries profit growth rate accelerated or narrowed down compared with January September; 25 industries profits increased year-on-year, 4 more than January September, and the profit growth reached 61%, including 12 industries profit growth rate reaching double-digit.

On November 27, Zhang Hangyan, a researcher at the Institute of industrial economics, Chinese Academy of Social Sciences, pointed out in an interview with the 21st century economic reporter that the significant improvement in industrial profits in the first 10 months was due to the obvious recovery of industrial production, on the other hand, the continuous narrowing of PPI in terms of price.

She pointed out that the added value of industries above designated size increased by 6.9% in October, which was the highest since March 2019. This shows that the production and operation of industrial enterprises continue to improve, and the manufacturing industry, which occupies the dominant position in the industry, still maintains rapid growth, which is the basis for the continuous improvement of industrial profits.

In terms of price, Zhang Hangyan pointed out that in October 2020, the ex factory prices of industrial producers in China decreased by 2.1% year-on-year, and remained flat on a month on month basis. Since May, the overall price decline has narrowed, which is conducive to the improvement of industrial profits.

In addition, Zhang Hangyan said that since the beginning of this year, China has introduced a series of policies to help enterprises and financial support the real economy. It is expected that tax cuts and fees reduction in the whole year are expected to exceed 2.5 trillion yuan, and financial support for the real economy may reach more than 1.5 trillion yuan, which is also conducive to improving the profits of enterprises.

Zhu Hong, a senior statistician at the industry department of the National Bureau of statistics, when interpreting the profit data of industrial enterprises, pointed out that with the implementation of a series of policies to help enterprises and financial support the real economy, the vitality of various market entities has been steadily restored and the profitability has improved. From January to October, the profits of private enterprises increased by 1.1% year-on-year, and decreased by 0.5% from January to September. The profits of foreign-funded enterprises and enterprises invested by Hong Kong, Macao and Taiwan increased by 3.5%, and the growth rate accelerated by 0.9%.

Zhu Hong pointed out that from January to October, the profits of equipment manufacturing industry increased by 9.6% year-on-year, 0.8% faster than that from January to September, and the profits of industries above designated size increased by 3.2% year-on-year. The profit growth of equipment manufacturing industry is accelerating, which is the largest contribution to industrial profit growth.

Among them, the electronics industry has been maintaining double-digit growth since the cumulative profit growth turned positive in April, with an increase of 12.6% from January to October, which makes a prominent contribution to the growth of industrial profits.

In addition, the general and special equipment manufacturing industries continued to grow rapidly, with the cumulative profits from January to October increasing by 12.0% and 22.9% respectively.

Zhang Hangyan believes that there are three reasons for the improvement in the profits of equipment manufacturing industry. First, the demand for electronics and other industries in the downstream has improved significantly. The epidemic has accelerated the online migration of various industries, the rapid development of remote office and distance education, which has brought about the accelerated development of electronic information industry such as mobile phone, notebook, integrated circuit, etc. Home appliances and electronic information industry are the main application fields of robot, high-end machine tool and other upstream equipment manufacturing industries.

Second, the auto industry is ushering in a boom cycle after years of downturn.

On the other hand, he pointed out that under the trend of normalization of epidemic prevention and control, many family industries began to consider switching from public transport to private car travel. In addition, the recent stimulus policies for the automobile industry have also brought about a sustained recovery of the automobile industry.

In October, the automobile manufacturing industry increased by 14.7%, and the automobile output increased by 11.1% to 2.481 million, including 165000 new energy vehicles, with an increase of 94.1%. The automobile industry is also the main application field of industrial robots, machine tools and other upstream equipment.

Industries such as new energy vehicles, 5g and consumer electronics are areas where industrial robots can show their talents, and these opportunities are exciting for robotics practitioners. Liang Rui, head of ABBs China robotics division, said in an interview with 21st century economic reporter at the recent China International Fair.

Third, Zhang Hangyan pointed out that this year, China has introduced a series of measures to stabilize industrial growth, which has led to an improvement in the demand for construction machinery.

Consumer goods demand rebounds

Zhu Hong pointed out that the steady rise in the profit growth rate of the consumer goods manufacturing industry is also an important reason for the recovery of industrial profits.

From January to October, driven by domestic demand recovery and export situation improvement, the profit of consumer goods manufacturing industry increased by 4.8% year-on-year, 0.4% faster than that from January to September.

Among them, the profits of agricultural and sideline food processing, food manufacturing, papermaking, tobacco and other industries maintained a double-digit growth of 10% - 30%; the profits of wine and beverage, textile and pharmaceutical industries increased by 5.1%, 7.6% and 8.7% respectively, which were faster than those from January to September; the profit decline of textile and clothing, wood processing, leather and fur, furniture manufacturing, chemical fiber and other industries also further narrowed.

Jiang feitao pointed out that the reason why the consumer goods market is getting better is that a large number of factories shut down in the first quarter of this year, and enterprises have begun to step up production one after another after returning to work. On the other hand, with the arrival of the peak season at the end of the year, the recent foreign trade performance has been significantly better than expected, and the domestic demand has also shown obvious signs of recovery.

Zhang Hangyan said that in the past two months, due to the domestic epidemic situation control is significantly better than that of foreign countries, and the supply chain is complete, some production in India and even in Southeast Asia is turning to China. For example, recently, the news about the transfer of orders from Indias textile and other industries to China for production has been incessantly heard. In October, the prices of cotton, cotton yarn, grey cloth, printing and dyeing and other textile raw materials rose sharply.

The same is true for furniture. Zhong sheming, deputy general manager of Guangdong Aimiao Furniture Co., Ltd., told the 21st century economic reporter that the export of furniture industry has been unprecedented recently, and many factory orders have been placed in the next year.

The recovery of demand also slowed down the growth of industrial finished goods inventory. At the end of October, the inventory of finished products of Industrial Enterprises above designated size increased by 6.9% year on year, 1.3 percentage points lower than that at the end of September.

At the end of October, the accounts receivable of Industrial Enterprises above Designated Size reached 16.77 trillion yuan, a year-on-year increase of 15.9%, which was 1.6 percentage points higher than that at the end of September; the average recovery period of accounts receivable was 54.7 days, an increase of 7.1 days compared with the end of September.

She pointed out that in the short term, industrial profits are still expected to maintain a sustained recovery momentum, but in the medium and long term, under the epidemic situation, there are still many uncertainties in internal and external demand, manufacturing investment is still declining, and the continuous improvement of enterprise profits is still facing many challenges.

This article is from Wang Xiaowu, editor in charge of economic report in the 21st century_ NF