(Yicai Global) July 27 -- Profits at China’s large industrial companies increased by 11.5 percent last month year on year, up 5.5 percentage points from May, as the country’s economic recovery continues to gain strength.

The companies, which are of a designated size with an annual turnover of more than CNY20 million (USD2.9 million), logged CNY666.6 billion (USD95.2 billion) in total profits, according to data released by the National Bureau of Statistics today.

The fast increase in industrial production and sales, lowered costs and improvements in the iron, oil and gas mining, petroleum processing, non-ferrous metal and other major sectors all accounted for the leap in industrial companies’ overall profit in June, said Zhu Hong, senior analyst at the NBS’ Department of Industrial Statistics.

Operating costs fell by CNY0.22 (USD0.03) for every CNY100 in business revenue last month, the first decline this year, easing pressure and improving efficiency.

However, whether their profitability can continue is not clear due to uncertainties on the demand side, especially in the overseas market, Liu Zhe, researcher at the Institute of Chinese Finance Studies at China’s Southwestern University of Finance and Economics, told Yicai Global. The complexity and severity of global economies and trade amid the ongoing spread of Covid-19 worldwide will continue to pose a challenge, she added.

In the first six months of the year, industrial firm’s profits shrank 12.8 percent to CNY2.51 trillion (USD358.6 billion).

Editors: Xu Wei, Kim Taylor