China's November industrial profits suffer sharpest fall in 27 months

Sat Dec 27, 2014 7:00am EST
 
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By Pete Sweeney

SHANGHAI (Reuters) - Chinese industrial profits dropped 4.2 percent in November to 676.12 billion yuan ($108.85 billion), official data showed on Saturday, 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-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.

"Increasing price falls shrank the space for profit," the agency said.

It said the impact of prices for coal, oil and basic materials falling to their lowest levels in years "was extremely clear".

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.

UPSIDE FOR TECH BUSINESSES   Continued...

 
An employee welds the exterior of a vehicle along a production line at a factory in Qingdao, Shandong province December 1, 2014. REUTERS/China Daily