Data published by the National Bureau of Statistics (NBS) showed that between January and February, industrial profits grew by 10.2% per year after falling 2.3% for the whole of 2023. The latest change will strengthen confidence that an economic recovery was gaining traction despite persistent sluggishness in the property sector. Economists said that after an unexpected increase in industrial production at the beginning of the year, the rise in industrial profits sends another signal of a gradual recovery from last year's drop, and if the recovery in production continues, it will contribute to achieving the economic growth target for 2024 of about 5%. However, the prospects for growth in industrial profits may be undermined by uncertain prospects for global demand, fluctuations in prices for energy and other commodities, as well as disruptions in supply chains due to geopolitical conflicts.
The report also showed that in the first two months of 2024, the profits of state-owned companies increased by 0.5% per year after declining by 3.4% last year, while profits of private companies rose by 12.7%, accelerating sharply compared to 2023 (+2.0%). Meanwhile, the profits of foreign companies rose by 31.2% from January to February 2024.
Profits in the manufacturing sector increased by 17.4% per annum from January to February, profits in the utility sector rose by 63.1% per annum, and profits in the consumer goods sector increased by 12.9% per annum. However, profits in the mining sector decreased by 21.1% per annum. Meanwhile, the main contributor to overall profit growth was equipment manufacturing (+28.9% per annum).