The National Bureau of Statistics recently released data show that from January to May, the operating income of industrial enterprises above designated size across the country increased by 2.9% year-on-year, and profits increased by 3.4% year-on-year, but the profit growth rate fell by 0.9 percentage points from January to April. How to view the current benefits of industrial enterprises? What signals do indicators send?

60WKS-CE240/22PB “As the effects of macro policies continue to be released, market demand is steadily recovering, industrial production is growing steadily, the efficiency of industrial enterprises above designated size continues to recover, and profits continue to grow.” Yu Weining, statistician of the industrial division of the National Bureau of Statistics, said.

According to statistics, in the first five months of this year, among the 41 industrial categories, 32 industries registered year-on-year profit growth, accounting for 78%, and the industry growth area expanded by 2.4 percentage points from 1 to April.

Industrial revenues are also continuing to rebound. In May, the operating income of industrial enterprises increased by 3.8% year-on-year, on the basis of the growth rate further accelerated by 0.5 percentage points from a decline to an increase in April.

From a longer time dimension, since 2023, the profit repair of industrial enterprises has stepped out of an upward curve. In the third quarter of 2023, the profits of industrial enterprises have changed from decline to increase for the first time after five consecutive quarters of year-on-year decline, and have now achieved three consecutive quarters of growth.

60WKS-CE240/22PB While raw materials manufacturing profits are still falling, the decline was 4.1 percentage points narrower in the January-May period than in the January-April period. The steel industry achieved a profit of 9.5 billion yuan in May, turning from loss to profit year-on-year, reversing the industry’s net loss for three consecutive months; The non-ferrous smelting industry was driven by rising product prices and other factors, and profits increased by 80.6% from January to May, the growth rate was 24 percentage points faster than that from January to April.

“The introduction of large-scale equipment updates and other policies has a significant pulling effect on the steel industry.” Zhang Longqiang, deputy secretary-general of the China Iron and Steel Association, said that it is estimated that in the next three years, the country’s annual new steel consumption will be at least 14 million tons. In addition, the release and implementation of relevant supporting policies has also increased the supply of scrap steel, providing more raw materials for iron and steel enterprises, reducing costs and improving production efficiency.