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Analysts at Nomura note that China’s industrial profit growth slowed again in September, to 4.1% y-o-y from 9.2% in August, taking the year-to-date number to 14.7% from 16.2% y-o-y ytd in August – much weaker than the 22.8% for the same period last year (full-year 2017: 21.0%).

Key Quotes

“The slowdown was broadly based: industrial profit growth at state-owned enterprises slowed to 23.3% y-o-y ytd from 26.7% in August; at private enterprises, to 9.3% from 10.0%, and at foreign enterprises, 5.7% from 7.6%.”

“Given both external and internal headwinds to economic growth, in addition to the high base last year (average industrial profit growth was 16.9% y-o-y in Q4), we expect industrial profit growth to continue to slow over the rest of the year.”