- China's industrial profits rose 15.1% in June from a year earlier, marking a slowdown for a second consecutive month after a 21.1% increase in May.
- Profits of major industrial firms in China increased 18.7% in the first half of 2026, according to the National Bureau of Statistics.
- Oil prices have contributed to the slowdown in industrial profit growth, as retreating prices have sapped earnings lift.
- For the first half of the year, companies grew earnings by 18.7%, which is below the Bloomberg Economics forecast of 19.2%.
- Producer prices in June experienced their first decline since July 2025, indicating waning inflationary momentum.
- Sluggish household spending and slumping domestic investment may pose challenges for profitability in the coming months.
China's industrial profits rose 15.1% in June, the weakest increase this year, following a 21.1% jump in May. This marks a slowdown for the second consecutive month, as reported by the National Bureau of Statistics on Monday.1
For the first half of 2026, profits climbed 18.7%, slightly below the Bloomberg Economics forecast of 19.2%. The data indicates an uneven recovery in the world's second-largest economy, with slumping domestic investment and sluggish household spending posing challenges for future profitability.6
Despite a surge in factory gate prices, which rose at the fastest rate in almost four years, producer prices experienced their first month-on-month decline since July 2025. This suggests that inflationary momentum has waned, raising concerns about the sustainability of profit growth.5
Adam Wolfe, an economist at Absolute Strategy Research, cautioned that the improvement in corporate profits may be short-lived, stating, “The tailwinds for AI-linked sectors may persist, but the rest of the economy seems likely to face stronger headwinds.” The data reflects ongoing challenges as the economy navigates recovery amidst global uncertainties.
“China's industrial profits increased 18.7% in the first half of 2026, but the June growth marked the weakest increase this year. Economists warn that slumping domestic investment and sluggish household spending could hinder profitability, especially without stronger stimulus measures to boost demand.”
CNBC
