Chinese industrial profits were down 4.2 per cent in November to 676.12 billion yuan ($108.85 billion), the biggest annual decline since August 2012 as the economy hit major unexpected headwinds in the second half, official data released today showed.
Despite last month's drop, profits for January-November stood 5.3 per cent higher than in the first 11 months of 2013, National Bureau of Statistics (NBS) data showed.
The bureau attributed the drop in profit to falling sales and a long-running slide in producer pricing power.
According to a Reuters report, increasing price slides squeezed the space for profit. The impact of prices for coal, oil and basic materials slumping to their lowest levels in years "was extremely clear," it added.
The NBS analysis suggested that the net slide in industrial profits was due mostly to weakness in coal mining, and oil and gas industries, where November profits retreated from a year earlier by 44.4 per cent and 13.2 per cent, respectively.
According to Xinhua, profits fell 2.1 per cent in October, increased 0.4 per cent in September, decreased 0.6 per cent in August and gained 13.5 per cent in July year-on-year.
During the January-November period, the total profits of industrial companies reached 5.62 trillion yuan, up 5.3 per cent year on year. However, growth fell by 1.4 percentage points from the January-October period.
Over the 11 month period, 33 of the 41 sectors surveyed reported year-on-year profit rises, with eight sectors seeing drops.
Coal mining profits fell 44.4 per cent year on year.
Profit growth at private firms was relatively stable at 7.2 per cent for January-November, while profits of state-owned enterprises fell 3.5 per cent year-on-year in the first 11 months.
The January-November period saw companies funded with overseas investment post the strongest profits growth logging an increase of 10.3 per cent year on year.
The agency's calculations include companies having annual business revenues exceeding 20 million yuan.