According to data released by the National Bureau of Statistics on August 27, in the first seven months of this year, industrial enterprises above designated size achieved a total profit of 4,892.95 billion yuan, a year-on-year decrease of 1.1%. In terms of different industries, among the 41 major industrial sectors, 16 industries saw a year-on-year increase in profits, accounting for 39.0%, the same as the first half of the year.
Zhu Hong, senior statistician of the Industrial Department of the National Bureau of Statistics, said that the benefits of industrial enterprises continued to recover, but the sustained and stable recovery of the industrial economy still required hard work. In the next stage, it is necessary to maintain the stability and smooth flow of the industrial chain and supply chain, actively expand effective investment, continuously release consumption potential, intensify efforts to help enterprises in bailouts, and create favorable conditions for the continued recovery of industrial enterprises’ efficiency.
The effect of the policy of stabilizing growth has gradually emerged
“Judging from the latest data on the benefits of industrial enterprises, steady growth is still in the stage of climbing and passing the hurdle, and we can’t relax in the slightest,” said Zhang Liqun, a researcher at the Macroeconomic Research Department of the Development Research Center of the State Council.
From the perspective of different industries, the improvement effect of the previous stable growth policy on the efficiency of industrial enterprises is gradually showing. Zhu Hong said that benefiting from favorable factors such as the continuous recovery of the industrial chain and the supply chain, the reduction and exemption of vehicle purchase tax policies to boost consumer demand and other favorable factors, the profits of the equipment manufacturing industry continued to recover, and the profits of the automobile industry recovered rapidly.
Data show that in the first seven months, the profit of equipment manufacturing industry fell by 5.7% year-on-year, but the decline narrowed by 2.1 percentage points compared with the first half of the year. In July, the profit of the equipment manufacturing industry increased by 6.8% year-on-year, the growth rate was 2.7 percentage points higher than that in June, and it has rebounded for three consecutive months. Among them, in July, the profit of the automobile manufacturing industry increased by 77.8% year-on-year, and the growth rate was 30.1 percentage points higher than that in June, making it one of the industries with the fastest profit growth; the profits of railway ships and other transportation equipment and electrical machinery industries increased by 29.6%, 25.6%, both achieved rapid growth.
It is worth noting that the pulling effect of price changes on the profit growth of industrial enterprises has weakened. Zhu Hong said that since the beginning of this year, the increase in the ex-factory price of industrial products has dropped month by month. In July, the PPI increased by 4.2% year-on-year, a decrease of 1.9 percentage points from the previous month. The price increase of industrial products gradually fell from a high level, and the stimulating effect on the growth of industrial enterprises’ income and profits gradually weakened. According to preliminary estimates, the decline in price increases caused the profit growth rate of industrial enterprises above designated size in the first seven months to drop by 2.3 percentage points compared with the first half of the year.
Consolidate the foundation for stabilization and recovery
“In general, the benefits of industrial enterprises continue to recover, but due to various factors, corporate profits have declined slightly, and operating pressure has increased. The sustained and stable recovery of the industrial economy still requires hard work.” Zhu Hong said.
Zhu Hong said that in the next stage, we must resolutely implement the decisions and deployments of the Party Central Committee and the State Council, efficiently coordinate epidemic prevention and control and economic and social development, maintain a stable and smooth industrial chain and supply chain, actively expand effective investment, continuously release consumption potential, and increase assistance to enterprises. The strength of the difficulties will be reduced, and favorable conditions will be created for the continued recovery of the benefits of industrial enterprises.
The Ministry of Industry and Information Technology recently emphasized that the current industrial economic situation is still complex and severe, and the foundation for stabilization and recovery is not yet solid. We must focus on implementing policies and expanding demand, and make greater efforts to stabilize industrial growth. Focusing on bailout assistance and environmental optimization, greater efforts will be made to protect market players. Focusing on coordinating epidemic prevention and control and industrial economic development, we will make greater efforts to ensure the stability of the industrial chain and supply chain.
Luo Huanjie, a senior macro researcher at the Zhixin Investment Research Institute, believes that with the weakening of the impact of the epidemic on the economy and the gradual subsidence of seasonal factors, the superimposed relief policies are further implemented, and the production and operation activities and profits of industrial enterprises are expected to improve once more. The macro team of Hongta Securities said that a new round of stable growth policies has been released recently, and the stimulating effect on the real estate, infrastructure and consumer industries is worth looking forward to.
