SHANGHAI: Profits of Chinese industrial businesses dropped 4.2 percent in November to 676.12 billion yuan ($108.85 billion), the biggest annual decline since August 2012 as the economy hit major unexpected headwinds in the second half.
Despite last month’s drop, profits for January to November were 5.3 percent higher than in the first 11 months of 2013, according to the National Bureau of Statistics (NBS) data.
The NBS attributed November’s profit drop to declining sales and a long running slide in producer pricing power. The agency said increasing price falls shrank the space for profit. Impact of prices for coal, oil and basic materials falling to their lowest levels in years was extremely clear.
Further the NBS analysis suggested, the net slide in industrial profits was driven primarily by weakness in coal mining, and oil and gas industries, where November profits tumbled from a year earlier by 44.4 percent and 13.2 percent respectively.