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

 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

Profit growth rate of 12 industries reached double digits

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.

With the policies of stabilizing infrastructure investment and promoting automobile consumption, the production and sales of trucks and new energy vehicles have improved, driving the profit of automobile manufacturing industry to recover steadily. From January to October, the profit increased by 6.6%, 3.6 percentage points faster than that from January to September.

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.

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

Jiang feitao, deputy director of the Industrial Operation Research Office of the Institute of industrial economics, Chinese Academy of Social Sciences, told the 21st century economic reporter that under the impact of the epidemic, automobile production in the first quarter was facing severe difficulties, and some parts were cut off for a time. However, with the gradual recovery of the domestic and foreign industrial chain, this breakpoint is being bridged, which has boosted the recent automobile industry and some automobile enterprises There are also cases of catching up with the schedule.

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.

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.

From the production side, in October, Chinas new energy vehicles, industrial robots, digging, shoveling and transporting machinery, micro-computer equipment, and integrated circuits increased by 94.1%, 38.5%, 30.2%, 28.0% and 20.4% respectively year-on-year.

Consumer goods demand rebounds

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 pointed out that with the approaching of Christmas at the end of the year, domestic and international market demand has obviously recovered, which has led to the rise of industrial consumer goods and industrial export delivery value. In October, industrial enterprises realized the export delivery value of 1126.8 billion yuan, a nominal increase of 4.3% over the same period of last year, while the growth rate in September dropped by 1.8%, which supported the improvement of the efficiency of industrial consumer goods.

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.

Accompanied by this, the export sector has appeared the situation of single container explosion and one container is difficult to obtain; and some manufacturing industries even started a new round of shortage mode.

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.

Zhang Yan said that the problem of capital flow still exists in the enterprise. In our research, we found that the inventory pressure of many enterprises has eased, but a large number of enterprises said that accounts receivable is becoming a big problem, and we should pay more attention to the problem of turning inventory into accounts receivable in the future.

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.

(author: Xia Xutian, editor: Bao Fangming)