China's industrial profit rose for the second straight month in May but at a much slower pace, pointing to persisting economic headwinds amid a protracted property slump.

Profits at China's industrial firms rose 0.7% in May from a year earlier, compared with 4.0% growth in April, according to data from the National Bureau of Statistics on Thursday.

In the first five months of the year, industrial profit rose 3.4% from a year earlier, stronger than a 2.3% drop recorded for the whole of 2023, official data showed.

The profit numbers came after China reported mixed figures earlier this month showing that consumption expanded at a faster pace in May but investment was weighed by sluggishness in the property sector.

Close to 80% of China's industrial sectors witnessed rising profits in the first five months, with the equipment manufacturing sector continuing to contribute the most to overall growth with an 11.5% profit jump. Earnings in the electronics and autos subsectors grew 56.8% and 17.9%, respectively, from January to May.

Profit growth for China's consumer manufacturing sector rose 10.9% in the first five months, down from the 12.0% gain in the January-April period. Meanwhile, the profit decline in China's raw-materials manufacturing sector eased over the same period, dropping 15.1%, with Beijing's equipment-upgrading program boosting the steel industry.

China's state-owned industrial companies reported a 2.4% decline in profits in the January-May period, narrowing from a 2.8% fall in the first four months, the statistics bureau said. Foreign firms witnessed a 12.6% increase in profits in the first five months, down from a 16.7% gain in January-April. Profits earned by private companies rose 7.6%, up from the first four months' 6.4% growth.

Despite the profit growth, China's statistics bureau cautioned that the country's domestic demand remains weak and that the foundation for industrial enterprises' profit recovery still needs to be consolidated.


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