(Yicai) May 27 -- China’s industrial firms posted stronger profit and revenue growth in April compared with the first quarter, supported by faster industrial production and an uptick in industrial goods prices, with raw materials manufacturing and new industries emerging as key drivers, according to the latest data.

In the first four months, industrial enterprises above a designated size, which refers to those companies with an annual revenue of at least CNY20 million (USD2.9 million), generated total profits of CNY2.4 trillion (USD354 billion), an increase of 18 percent year on year, the National Bureau of Statistics said today. This was about 3 percentage points faster than in the first quarter. In April alone, profit growth accelerated to 25 percent.

Over the same period, total revenue at these large industrial firms jumped 5.2 percent to CNY44.9 trillion (USD6.6 trillion), about 0.2 percentage point faster than in the first quarter. In April, revenue growth was 5.7 percent.

By industry, profits in the raw materials manufacturing sector surged 88 percent in the four months ended April 30 from a year ago, about 10 percentage points faster than in the first quarter and contributing 10 percentage points to the overall profit growth of industrial firms.

The soaring profitability was mainly driven by rising oil prices which lifted prices along related industrial chains, as well as strong demand for non-ferrous metals fueled by the rapid development of new energy and artificial intelligence, said Yu Weining, chief statistician at the NBS' industrial department.

High-tech manufacturing remained strong, with profits jumping 45 percent in the first four months year on year, contributing 8 percentage points to overall industrial profit growth. Within this sector, semiconductor-related industries saw particularly sharp gains. Profits in electronic specialty materials, fiber optics and optoelectronic devices, soared 602 percent, 348 percent and 51 percent, respectively, Yu added.

China’s producer price index, which is a measure of factory-gate prices, climbed 2.8 percent in April from the year before, a gain of 2.3 percentage points compared to the previous month, according to NBS figures released earlier this month. The increase was mainly driven by imported inflation from higher international oil prices as well as rising prices for products such as optical fibers and storage due to growing demand for computing power.

Last month, the profits of industrial enterprises showed faster growth, better structure and improved quality, indicating that the recovery of the industrial economy is gaining momentum, Pang Ming, senior researcher at the National Institute for Finance and Development, told Yicai. However, there are clear disparities among industries, with traditional manufacturing under pressure while emerging industries continue to show strong vitality. Future trends will still depend on external demand and fluctuations in commodity prices.

Looking ahead, the impact of rising oil prices and the conflict in the Middle East may become more pronounced in the second quarter, said Wen Bin, chief economist of China Minsheng Bank. While this supports profitability in the raw materials sector, it may also squeeze margins in mid- and downstream manufacturing and disrupt external demand, shipping and supply chains.

Editors: Dou Shicong, Kim Taylor