Staff working on rebars at a factory in Hangzhou in China
Staff working on rebars at a factory in Hangzhou in China. Chinese factory output data was the weakest in 17 years. Image Credit: AFP

Beijing: Profits at China's industrial firms fell at a faster clip in the January-September period as COVID-19 curbs and a worsening property crisis continued to weigh heavily on factory activity.

Profits fell 2.3 per cent in the first nine months of 2022 from a year earlier, after a 2.1 per cent drop in the January-August period, according to data from the National Bureau of Statistics (NBS) released on Thursday.

The bureau did not report standalone figures for September and August, but said in a separate statement that the decline in profits at industrial firms in September narrowed by 6.0 percentage points compared with the previous month.

After nearly contracting in spring, China's third-quarter economic growth was faster than expected, helped by a raft of government measures.

September activity data showed strong industrial output, but prolonged property woes, slower exports and stubbornly weak retail sales are clouding the outlook for a more robust recovery in the longer term.

Last month, China's industrial output jumped 6.3% from a year earlier, outstripping expectations for 4.5 per cent growth and a 4.2 per cent expansion in August.

Despite better-than-expected third quarter GDP growth, analysts at Goldman Sachs cut their fourth quarter growth forecast to 3.5 per cent on a quarter-on-quarter annualised basis from 5.0 per cent previously.

"High-frequency data including emerging industries PMI (EPMI), new home sales, auto sales, transportation and long holiday tourism revenue pointed to a likely weak start in Q4," Goldman Sachs analysts said.

Industrial profits data covers large firms with annual revenues above 20 million yuan ($2.79 million) from their main operations.