BEIJING (Reuters – China’s industry firms saw profits grow at a slower rate in November than usual, according to the statistics bureau. The slow growth was caused by falling prices for some raw materials and weaker demand from consumers.

In November, profits rose 9.0% year-over-year to 805.96 Billion Yuan ($126.54 Billillion), a significant improvement on the October gain of 24.6%.

The January-November period saw industrial companies’ profits rise 38.0% year on year to 7.98 trillion Yuan. This was slower than the 42.2% increase in the first 10 month of 2021.

Zhu Hong is a senior statistician with NBS. He stated that while the state’s efforts to lower wholesale prices in November put pressure on downstream industries, curbs to the sector have meant that the contributions of the raw materials and mining sectors to profit growth has dwindled.

Zhu stated that companies are still facing great cost pressures and said the downstream sector must see further profits growth.

China’s factory gate inflation was hot in China, but it cooled in November due to the crackdown of runaway commodity prices by the government and an easing power crunch. Beijing attempted to mitigate the devastating economic effects of surging cost.

After a strong recovery from last year’s pandemic, the world’s second largest economy has been struggling. It now faces many challenges, including a deepening property market, persistent supply bottlenecks and tight COVID-19 restrictions that will impact consumer spending.

While the country’s financial distress has had a negative impact on steel, cement and glass production are also at risk.

China’s leaders made a commitment to stabilize the economy, and that they would keep its growth rate within an acceptable range for 2022 in this key meeting.

In an effort to spur growth, The People’s Bank of China(PBOC) reduced the reserve amount of banks and lowered their benchmark lending rate by one year.

This data includes industrial profits for large businesses with an annual revenue exceeding 20,000,000 yuan.