(Yicai Global) May 29 -- The decline in profits at China's industrial companies slowed for the second month in a row in April, according to the National Bureau of Statistics.

Profits at industrial firms with an annual turnover of at least CNY20 million (USD2.9 million) fell 18.2 percent last month from a year earlier, NBS data released on May 27 showed. Profits shrank 19.2 percent in March. For the first four months of this year, they dropped 20.6 percent to CNY2 trillion (USD283.1 billion).

The decline is relatively steep, according to analysts. China is facing slow growth in domestic demand and weak external demand, resulting in a lower capacity utilization rate at firms, while operating costs remain high, so any rebound in industrial profits is not expected until the fourth quarter.

Among the 41 industrial categories, 23 saw faster profit growth, slower profit decline, or returned to growth in April from March.

Profits among equipment makers jumped 29.8 percent from a year ago, boosting total earnings by 6.4 percentage points, the highest among all manufacturers, according to NBS statistician Sun Xiao. They accounted for 34.3 percent of all industrial profits in April, up from 32.8 percent in the previous month.

Meanwhile, profits in the chemicals and coal mining industries fell the most, tumbling 63 percent and 36 percent respectively to drag total industrial profits down 14.3 percentage points.

Production continued to recover last month, with revenues at industrial firms up 3.1 percentage points at 3.7 percent, Sun noted.

The quicker pace of revenue growth reflects the active pickup in demand and the fact that industrial companies may have already entered a destocking stage, said Li Chao, chief economist at Zheshang Securities. But a lack of profit growth discourages businesses from expanding production capacity and utilization rates, Li added, noting that the drop in supply is still larger than the recovery in demand.

China will implement measures to unleash consumption and build a high-quality supply system to recover and expand demand and spur the stable growth of industrial companies, Meng Wei, a spokesperson for the National Development and Reform Commission, said recently.

The country will also take action to stabilize and expand investment in the manufacturing sector, coordinate and make good use of investment in the central budget, local government special bonds, and structural monetary policy tools to boost medium- and long-term lending to the sector and expand investment related to industrial and technological reforms to spur equipment upgrades among firms, Meng noted.

Editors: Liao Shumin, Futura Costaglione