The profit growth of industrial enterprises increased in October. On November 27, the Bureau of Statistics announced the profits of Industrial Enterprises above Designated Size in October. From January to October, industrial enterprises above Designated Size achieved a total profit of 7164.99 billion yuan, a year-on-year increase of 42.2% and an average increase of 19.7% in the two years. In October, the monthly profit increased by 24.6% year-on-year. In October, the profits of industrial enterprises rebounded steadily, corresponding to the high point of 13.5% year-on-year PPI in October. Upstream raw material prices remained high, and the profits of industrial enterprises maintained a high growth rate, forming support.
Upstream industries such as petroleum, coal chemical industry and ferrous metals are the main reasons for the recovery of industrial profit growth. Under the high operation of energy prices, in October, the total profit of oil, coal and other fuel processing industry increased by 5.76 times year-on-year, the oil and natural gas mining industry increased by 2.63 times, and the coal mining and washing industry increased by 2.10 times, but the profit of power and heat industry decreased.
The profit growth of the midstream manufacturing industry was steady, but fell month on month. The computer, communication and other electronic equipment manufacturing industry increased by 34.3%, the special equipment manufacturing industry increased by 14.9%, and the electrical machinery and equipment manufacturing industry increased by 14.6%, but both fell month on month. The general equipment manufacturing industry increased by 13.7%, the automobile manufacturing industry decreased by 2.9%, and the textile industry increased by 1.9%.
The profit of consumer goods manufacturing industry has changed from decline to increase, and the profit of agricultural and sideline food industry has declined. In October, the market demand for relevant consumer goods was driven by factors such as the increase of goods preparation orders during the shopping festival. The profit of consumer goods manufacturing industry increased by 3.6% from a year-on-year decrease last month, but the agricultural and non-staple food processing industry decreased by 10.0%. The overall performance of consumer goods is relatively differentiated.
Overall, the profits of industrial enterprises rebounded significantly in October, which was stronger than seasonality as a whole. In addition to the base effect, the contribution of prices and profits of upstream industries is still the main reason for support, and the performance of other industries is relatively differentiated. However, the prices of coal and other raw materials fell in recent months under the measures of ensuring supply and stabilizing prices, and with the gradual peak decline of PPI, the subsequent transmission of profits from upstream to middle and downstream will continue, but the process is expected to be slow. Midstream and downstream enterprises still face great cost pressure, and the obvious improvement of downstream profits may still need the boost of terminal demand. The recovery of inventory was partly driven by shopping festival factors, and the sustainability of maintaining a high level in the future was limited. The follow-up PPI may slow down at a high level, but it is supported by the low profit base of industrial enterprises in November last year. It is expected that the profit growth rate of follow-up industrial enterprises will remain high, but the contribution of upstream industries to the whole industrial profit is expected to fall.
