Goldman Sachs on China: April Industrial Profits Surge 26% Year-over-Year
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Goldman Sachs highlights a substantial improvement in China's industrial sector, reporting that industrial profits surged 26.0% year-over-year in April, a significant acceleration from the 16.0% growth recorded in March. On a seasonally adjusted basis, industrial profits rose 8.5% month-over-month, effectively reversing the stagnant performance seen in the previous month. Industrial revenue also demonstrated robust momentum, growing 5.8% year-over-year, up from 4.5% in March, alongside a 0.8% seasonally adjusted monthly increase. The primary catalyst for this profit expansion originated in the upstream sector, where profits skyrocketed 83.5% compared to the prior year. This extraordinary growth was propelled by strong earnings in chemical materials, non-ferrous metal mining, and smelting operations. The bank notes that these upstream gains were structurally supported by two key factors: elevated oil prices boosting petroleum processing margins, and intense artificial intelligence capital expenditure driving robust demand for strategic metals like aluminum, copper, and gold. Encouragingly, the profit recovery was not exclusively confined to upstream commodities; downstream industrial profits also rebounded, posting a 9.0% year-over-year increase and recovering from a marginal contraction in March. Looking ahead to May purchasing managers index data, Goldman Sachs anticipates a divergence in performance, forecasting a slight deceleration in the official NBS manufacturing PMI to 50.1.
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