On May 27, the National Bureau of Statistics released the latest data showing that in the first four months of this year, the profits of industrial enterprises nationwide increased by 18.2% year-on-year, and the growth rate accelerated by 2.7 percentage points from the first quarter. In April, the year-on-year growth rate reached 24.7%, showing a strong recovery trend. Profit reflects a company's profitability, operating efficiency and internal vitality, and provides an important perspective for observing industrial production trends and judging the macroeconomic situation. Through this eye-catching growth data, three positive economic signals are clearly visible.

Signal 1: Profits are steadily increasing, confirming that the recovery momentum of the real economy is solid and powerful.

In the first two months, it was 15.2%; in the first quarter, it was 15.5%; in the first four months, it was 18.2%... Since the beginning of this year, the growth rate of industrial profits has continued to rise and strengthened month by month, breaking the periodic fluctuation trend, indicating that the industrial economy is steadily recovering and that sustained repair has endogenous power.

Looking at several related indicators together, this trend is even more obvious -

Look first at the PMI (Manufacturing Purchasing Managers Index). In April, it reached 50.3%, which has been above the 50% boom-bust line for two consecutive months, and the prosperity level has continued to expand.

Look at PPI (industrial producer price). In March, it rose 0.5% year-on-year, ending 41 consecutive months of year-on-year decline. On this basis, prices increased by 2.8% year-on-year in April, and domestic supply and demand further improved.

Industrial production has maintained rapid growth and industrial product prices have steadily rebounded, which have jointly promoted the steady growth of operating income of industrial enterprises and become an important support for the continued recovery of corporate efficiency and the recovery of industrial economic profitability.

Signal 2: The structure continues to be optimized, and new kinetic energy has become the core engine of industrial growth.

Where does the 18.2% profit growth rate come from?

Look at the structure through the total amount. From January to April, the profits of equipment manufacturing, high-tech manufacturing, and raw material manufacturing increased by 15.4%, 44.8%, and 88.1% respectively year-on-year, driving the profits of all industrial enterprises above designated size to increase by 5.4, 7.8, and 10.3 percentage points respectively. New momentum has become the "power source" to push up the profits of industrial enterprises.

This sign has also been confirmed by "Made in China", which has been frequently "exploded" in recent times.

Breaking down the high-growth products: aluminum plates, strips and foils are selling well, behind which is the turmoil of new energy batteries and high-end manufacturing; the "super heart" is booming, thanks to the surge in demand for high-end gas turbines in offshore oil and gas development and clean energy power station construction; the intensive implementation of computing power centers has pushed domestic optical fiber to the center of the stage... From macro data to micro products, behind the 18.2% profit growth rate, China's industrial transformation and upgrading, and the acceleration of the conversion of new and old driving forces are marked.

Signal 3: Unit costs are falling, and the effectiveness of macro-control continues to be released.

Profit and cost are closely related. Behind the continuous improvement of corporate profits, cost reduction has an obvious effect. From January to April, the cost per 100 yuan of operating income of industrial enterprises above designated size was 84.94 yuan, a year-on-year decrease of 0.55 yuan. The cumulative unit cost has declined for four consecutive months this year, pushing the revenue profit margin of industrial enterprises above designated size to reach the highest level in the same period since 2023.

Behind this, we cannot do without the help of macro policies: the structural monetary policy interest rate has dropped for the first time this year, a special fund of 100 billion yuan has been set up to coordinate fiscal and financial cooperation to promote domestic demand, and the comprehensive rectification of "involved" competition has continued to be effective... Since this year, macro policies have been targeted to stimulate market vitality, promote a smoother economic cycle, and help enterprises continue to improve their operating performance.

While clearly identifying the positive trends, we must also face up to the challenges we face. At present, the external situation is complex and changeable, the contradiction between strong domestic supply and weak demand is still prominent, and the profit levels of different industries are divergent. In the next stage, we must further strengthen macroeconomic policy adjustments, continue to expand domestic demand, optimize supply, and promote the sustained and healthy development of the industrial economy.

With firm confidence and continuous forge ahead, China’s economy will continue to consolidate, expand and pick up the momentum.