China’s industrial profits fell the most in two years last month

  • Latest data from the the National Bureau of Statistics (NBS) in Beijing show a deepening slowdown, with total profits of China’s industrial enterprises in November down 4.2% y/y from a year earlier
  • October’s reading was down 2.1%, September’s was up 0.4%
  • November’s reading is the the biggest slide since August 2012

Says Bloomberg:

  • Mired in industrial overcapacity, factory-gate deflation and a housing slump, China is headed for its slowest full-year economic expansion since 1990
  • A Chinese factory index fell to a seven-month low in December
  • While growth in aggregate financing, the broadest gauge of credit, trailed estimates in November
  • Imports unexpectedly dropped amid weak demand

More at Reuters:

  • Despite last month’s drop, profits for January-November were 5.3 percent higher than in the first 11 months of 2013
  • As 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 … said the impact of prices for coal, oil and basic materials falling to their lowest levels in years “was extremely clear”
  • Oil, coking coal and nuclear fuel processing industries saw their profits slide by 34.2 percent
  • On the upside, Chinese technology industries saw profits grow sharply last month. Telecommunications firms saw a 20.7 percent increase, electronics and machinery grew 15.1 percent and automobile manufacturers enjoyed a 16.7 percent gain
  • “This suggests that on the one hand, in the context of weak investment demand, stable consumption demand provided a certain degree of support; on the other hand, promoting industry restructuring is having a positive effect on efficiency”

There ya go … data not good, but some bright spots. Something for both the bears and bulls!