Industrial profits rise 4.3% year-on-year in Q1, a slowdown from earlier months, signaling uneven economic recovery.

China’s industrial profits grew at a slower pace in the first quarter of 2024, according to official data released on Saturday (April 27). Profits from industrial firms increased by 4.3% compared to the same period last year, a notable deceleration from the 10.2% rise recorded in the first two months of the year.

The March data revealed a 3.5% year-on-year decline in profits, marking a downturn that raises concerns about the strength of China’s recovery. The National Bureau of Statistics (NBS) did not provide detailed monthly figures for January and February, but had previously indicated that profits had been rising steadily since August 2023.

These profit figures align with other recent economic indicators, such as retail sales and industrial output, which point to weaker-than-expected domestic demand despite solid growth in the country’s GDP during the first quarter. Analysts are increasingly concerned that the initial signs of economic momentum have given way to a more uneven and fragile recovery.

Additionally, concerns over the sustainability of economic growth were underscored by comments from senior officials at China’s central bank last week, who signaled caution regarding the outlook for credit, as domestic demand for loans remains subdued.