(Yicai) Aug. 8 -- Profits in China’s machinery industry rose 12.2 percent in the first half, but large businesses struggled and 60 percent of firms complained about a lack of orders, according to industry data.

Industrial enterprises with annual revenue of at least CNY20 million (USD2.8 million) saw their profits slide 16.8 percent in the six months ended June 30, data from the China Machinery Industry Federation showed yesterday.

The industry has been steadily improving in terms of structure and development quality, with multiple support policies coming into force, but one of the main reasons for the rise in profits was the low base of comparison from last year, said Luo Junjie, the federation’s executive vice president.

The industry is likely to see stable growth this half, but the major indexes will increase more slowly due to the rising base, Luo noted, so industrial added value, operating revenue, and profit are expected to gain by around 5 percent this year from 2022.

The industry still faces pressure, as there are risks of a global economic recession, concerns over inflation, and geopolitical conflicts that pose a threat to the global trade recovery, Luo said, adding that the Chinese market also faces multiple challenges such as sluggish demand and difficulties in the economic transition.

Another issue is that machinery firms do not have enough orders, and most of their orders are short term. The data showed that 60 percent said they do have not enough orders, up from 54 percent at the end of the first quarter, and 34 percent of firms have orders that are just enough for a month, while 48 percent have orders that will cover the third quarter. Others said that orders had been postponed, and it is still likely to take some time for the market to recover fully.

The industry posted operating revenue of CNY13.6 trillion (USD1.9 trillion) in the first half, up 9.4 percent from a year earlier, which is 9.8 percentage points faster than the growth in the national industrial revenue.

It also posted CNY775.2 billion (USD108.6 billion) in profit, up 12.2 percent, which is 29 points higher than the national industrial profit. The industry’s added value jumped 9.7 percent in the first half from a year ago, which is 5.9 points faster than the growth in the national industry, per statistics from the federation.

The federation did not specify whether the profit is net or gross.

Editor: Tom Litting