(Yicai) July 29 -- Profit growth at China’s industrial enterprises accelerated in the first half of the year, according to the latest official data.

Profits at industrial companies with an annual turnover of at least CNY20 million (USD2.8 million) rose 3.5 percent in the six months ended June 30 from a year earlier, versus a 3.4 percent growth in the first five months of the year, according to data released by the National Bureau of Statistics on July 27.

Last month, profit surged 3.6 percent from the same period of last year, compared with an increase of 0.7 percent in May, NBS data also showed.

The business revenue of industrial firms above the designated size jumped 2.9 percent in the first half from a year earlier, the same as in the first five months, according to the NBS.

The stable and fast growth of industrial production, as well as the prominent narrowing of the decrease in industrial products’ ex-factory cost since the second quarter of the year, boosted the steady recovery in corporate revenues, which in turn created favorable conditions for the constant profit growth, said Yu Weining, a statistician at the NBS’ department of industrial statistics.

The recovery of industrial profits will face some pressure in the second half, mainly because of the high base from last year, Wu Chaoming, deputy director of the Chasing International Economic Institute, told Yicai.

In the future, there will still be great uncertainties about the recovery of the real estate sector, so the extent of the industrial profit recovery should not be overestimated, Wu noted. Moreover, private enterprises’ investment confidence still needs to be improved.

The decline in the producer price index will continue to shrink but will not be reversed this year, Wu added. However, the adverse impacts of price-relevant factors on industrial profits will be weakened.

The demand is expected to be spurred by strengthening policies but will remain weak against strong supply, so industrial profits will not be able to improve significantly, Wu pointed out.

Editor: Futura Costaglione