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Profits at China’s industrial firms slumped in the first four months of 2023, official data showed on Saturday, as companies continued to struggle with margin pressures and soft demand amid a faltering economic recovery.
Profits fell 20.6 percent in January-April from a year earlier, compared with a 21.4-percent decline in the first three months, according to data from the National Bureau of Statistics (NBS).
In April alone, industrial firms posted a 18.2-percent drop in profit year-on-year, according to the NBS, which only occasionally gives monthly figures. Profits shrank 19.2 percent in March.
“Overall, today’s data shows that industrial enterprises, especially private and equity-owned enterprises, continue to be affected by a combination of unfavorable factors such as the base effect, short-term pressure on the economic recovery and the downward trend of PPI (producer prices),” said Bruce Pang, chief economist at Jones Lang Lasalle.
Chinese companies are struggling with both weak demand at home and softening demand in the country’s major export markets.
Producer deflation deepened in April, with the producer price index (PPI) falling at the fastest clip since May 2020.
Lenovo, the world’s largest PC maker, said this week that quarterly revenue and profit tanked in January-March and it had cut 8 percent to 9percent of its workforce to reduce costs, as global demand for personal computers (PCs) continued to slump.
