(Yicai) June 27 -- Profit growth at China's industrial firms decelerated in the first five months of the year, according to the latest official data.

Profits at industrial companies with annual turnover of at least CNY20 million (USD2.8 million) rose 3.4 percent in the five months ended May 31 from a year earlier, versus 4.3 percent growth in the first four months of 2024, data from the National Bureau of Statistics showed today.

Last month, earnings inched up 0.7 percent from the same period of last year, compared with an increase of 4 percent in April, the figures showed.

Short-term factors such as the narrowing return on investment were behind the slowdown, said Yu Weining, a statistician at the NBS' department of industrial statistics.

Profits at state-owned enterprises fell 2.4 percent in the five-month period, compared with a decline of 2.8 percent in January to April, while those in the private sector rose 7.6 percent, increasing from 6.4 percent.

Earnings climbed in 78 percent of the industry segments, a 2.4 percentage point increase on January to April. Equipment manufacturing was a key driver, with profits jumping 11.5 percent, thanks to the in-depth development of its high-end, smart, and green transition, Yu noted.

Operating revenues at industrial firms above the designated size rose 2.9 percent between January and May from the same period last year, compared with a gain of 2.6 percent in the first four months, according to the NBS data. Last month, operating revenues rose 3.8 percent from a year ago, up 0.5 point from April. They fell in March.

With the implementation of new real estate stimulus policies, the faster pace of ultra-long special government bond sales, and strong new momentum, the recovery in domestic demand is expected to continue and industrial production is likely to remain a strong support for corporate profits, said Wu Chaoming, deputy director of the Chasing International Economic Institute.

But there is still much uncertainty surrounding the pickup in the property market, and the confidence of private businesses to invest needs a further boost, Wu added, noting that this latest upturn in corporate profits will face setbacks, and its extent should not be overestimated.

Editors: Shi Yi, Futura Costaglione