Profits at Chinese industrial firms fell 6.7% in July from a year ago, marking the seventh straight month of declines and pointing to continued weakness in the world's second largest economy.
Data from the National Bureau of Statistics showed profits declined 15.5% in the first seven months of the year from the same period in 2021, after falling 16.8% in the first half. Profit fell 8.3% in June from a year ago.
The statistics bureau attributed the slower decline to falling commodity prices and easing cost pressures. However, corporate profits remain under pressure as costs have climbed back up recently despite some moderation.
State firms saw a 20.3% drop, while profits fell 12.4% at foreign firms and 10.7% at private companies in the January-July period. 28 of 41 industries saw profit declines, led by a 90.5% plunge for iron and steel smelting.
China's central bank has vowed to maintain its "prudent" monetary policy to support economic recovery. However, analysts have lowered growth forecasts below the official target of around 5% on weakening recovery amid continued property downturn and cooling consumer spending. Slipping credit growth is also a concern, prompting authorities to cut interest rates further.
The profit decline highlights continued challenges in stabilizing China's economy amid weak demand and ongoing Covid curbs, clouding the growth outlook for the rest of the year.
