China’s industrial profits increased 15.1% in June from a year earlier, according to data released Monday by the National Bureau of Statistics. Even so, the pace of growth slowed for a second consecutive month, suggesting that part of the earlier earnings momentum is starting to fade.
A key reason appears to be weaker support from energy-related industries as oil prices retreat. Lower energy prices can ease costs for some manufacturers, but they also reduce the profit lift that stronger oil markets had been providing to parts of the industrial sector.
The June figures still point to a notable recovery in corporate earnings this year. Industrial companies have delivered one of the economy’s stronger turnarounds, moving from barely positive profit growth earlier in the period to double-digit gains.
Still, the latest slowdown shows that the rebound is becoming less uniform. While profits remain higher than a year ago, softer oil prices are limiting one of the factors that had been helping drive stronger industrial earnings in recent months.
