According to data from the National Bureau of Statistics (NBS), China’s industrial profits dropped at the fastest pace in the past two years.
Factories shut-down, high raw material costs, and slow business activity are among the factors contributing to the drop.
The country’s industrial profits declined 8.5% from a year earlier, after seeing a 12.2% gain in March.
Zhu Hong, a senior NBS statistician, said, “In April, frequent Covid-19 outbreaks were widespread in some regions, creating big shocks to the production and operations of industrial firms and leading to a drop in their profits.”
The manufacturing sector’s profit fell by 22.4%; utilities firms’ profits decreased by 26.8% in April.
Some regions and industries have been greatly affected by the epidemic. In the first four months, industrial sector profits in the Eastern and Northeast regions fell by 16.7% and 8.1%, respectively.
April official data was released after Chinese Premier Li Keqiang held a virtual meeting with about 100,000 government officials several days ago. During the meeting, Li set out goals to prevent the economy from going down further and balance Covid controls and economic growth.
Last week, financial hub Shanghai also reported a significant drop in all areas of its economic activities when factories were forced to shut down during the Covid lockdown.
Shanghai’s industrial output shrank 61.5% in April, compared to a 7.5% drop in March.
Shanghai’s April retail sales plummeted 48.3%, much lower than the 11.1% drop nationwide.
The city’s property sales by floor area in April sank 88%.