Chinese industrial firm’s profit fell at their fastest pace in two years in April as high raw material prices and supply chain chaos caused by COVID-19 curbs squeezed margins and disrupted factory activity.
According to data for the National Bureau of Statistics (NBS) and Reuters calculation, profits shrank 8.5% from a year earlier, swinging from a 12.2% gain in March. The slump is the biggest since March 2020.
Industrial firms’ profits grew 3.5% year-on-year to 2.66 trillion yuan ($395.01 billion) for the January-April period, slowing from an 8.5% increase in the first three months, the statistics bureau said.
“In April, frequent COVID-19 outbreaks were widespread in some regions, creating big shocks to the production and operations of industrial firms and leading to a drop in their profits,” Zhu Hong, senior NBS statistician, said in a statement.
The COVID-hit eastern and northeastern regions suffered profit declines in the first four months of 16.7% and 8.1%, respectively, Zhu said. The autos factory sector dragged down manufacturing profits by 6.7 percentage points in April.
