[ad_1]
Bisnis.com, JAKARTA – China's industrial profit growth slowed for 5 consecutive months in September 2018.
This decline is due to the fluctuation in sales of raw materials and manufactured goods, along with increasingly gloomy domestic demand from the world's second-largest economy.
According to Reuters, the slowdown was in line with data released last week that factory output in the third quarter of 2018 had risen at its weakest pace since February 2016.
The slowdown in corporate profits will automatically put pressure on employment. In the end, household consumption must be curbed and have an impact on China's overall growth.
The National Bureau of Statistics (NBS) said Saturday (27/10/2018) that industrial profits rose 4.1 percent on an annual basis in the third quarter of 2018, reaching 545.5 billion yuan (78 percent). , $ 57 billion).
The achievement was less than half of the performance achieved in August 2018 and had increased at the latest since the completion of March 2018.
The proliferation of trade wars with the United States is also putting additional pressure on global production and threatening to slow down corporate investment and earnings growth next month.
Data released last week showed that the Chinese economy in the third quarter had recorded the strongest growth since the global financial crisis, due to the slowdown in manufacturing output.
The manufacturing sector has also been under pressure due to a reduction in credit sources following Beijing's actions on corporate debt and risky lending practices.
When the authorities try to reduce the pressure on companies facing liquidity problems, many companies still face difficulties in obtaining financing. Interest rates on loans have also increased because of the reduction in the supply of credit.
The decline in performance is also produced in the real estate market, which is driving China's economic growth. Weak demand for construction-related goods and services limits industrial profits.
Although Beijing has approved more projects in the second half of this year, weak investment in infrastructure has also put additional pressure on industrial companies.
In the first nine months of this year, industrial profits increased by 14.7%. This has been fueled by the revenues of companies that produce steel, building materials, petroleum and petrochemicals.
However, growth slowed compared to the 16.2% observed from January to August 2018.
Earlier this month, Jiangsu Shagang Co Ltd (002075.SZ), a subsidiary of China's largest privately owned steel plant, Shagang Group, announced a 91.5 percent increase in net profit for the third quarter.
According to Argonaut Securities badysts in Hong Kong, the average profit margin for steel remains very high.
Responsibility Industrial enterprises grew 6.1 percent year-on-year to 63.1 trillion yuan, compared with a 6.6 percent increase at the end of August.
Statistics office data includes large companies with annual revenues exceeding 20 million yuan from their main business activities.
Source: Reuters
[ad_2]
Source link
