Profits at China’s industrial firms nearly doubled in March from a year ago, as demand for raw materials surged along with the economic recovery, official data showed on Tuesday. Profits rose to 711.18 billion yuan ($109.66 billion) in March, up 92.3% from a year ago, when the economy was hard hit by the COVID-19 crisis.
The pace of growth slowed from the first two months of the year. Profits grew 179% in January-February compared with the same period in 2020. This year also saw more production than usual around the Lunar New Year holiday period as workers stayed put due to COVID-19 concerns, rather than going back home.
Strong profits in raw materials extraction and processing industries, in particular chemicals, metals and petroleum, helped drive overall industrial profit growth in March as demand picked up, said Zhu Hong, an official at the NBS in a statement.
Industrial firms’ profits rose to 1.825 trillion yuan in the January-March period, up 137% from a year ago and 50.2% from same period in 2019.
China’s gross domestic product quickened sharply in the first quarter and posted a record growth of 18.3%, driven by stronger demand at home and abroad.
However, the data undershot the 19% forecast by economists in a Reuters poll, and analysts expect the brisk expansion, heavily skewed by the virus-related plunge in activity a year earlier, to moderate later this year.
China’s exports rose sharply in March and imports posted their highest surge in four years last month, with factory activity rising at a faster-than-expected pace.