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Metal mold industry profit growth trend
The metal mold industry is experiencing a positive shift as experts predict increased profitability driven by strategic investments in technology and management. Many hardware mold companies, previously constrained by limited capital and weak brand recognition, are now focusing on expanding their high-end product offerings and establishing domestic sales channels to tap into the growing local market. This transformation is expected to significantly boost their long-term growth.
Looking ahead, Chinese industrial companies are anticipated to see a notable rise in profits over the coming months. After a strong rebound in the fourth quarter of last year, fueled by the recovery of the world’s second-largest economy, the sector has shown consistent improvement. In December alone, the total profit of large-scale industrial enterprises surged by 17.3% year-on-year to 895.2 billion yuan (approximately $144 billion), marking the third consecutive month of double-digit growth.
This positive trend follows eight consecutive months of declining profits in 2012, which raised concerns among investors. In response, the government implemented more flexible monetary policies and increased infrastructure spending to stimulate economic activity. Despite these challenges, the outlook for 2013 remains optimistic.
According to the leader of the China Manufacturing Champions League, industrial companies are expected to achieve an average profit growth of 30% in 2013, with the highest growth rate likely occurring in the third quarter. The key drivers behind this improvement include stronger infrastructure and real estate investment, modestly rising export demand, falling raw material prices, and a low base from 2012. This would represent a significant recovery from the 5.3% growth recorded in 2012.
China's GDP grew by 7.8% in 2012—the lowest in 13 years—but the economy showed resilience in the fourth quarter, helping industrial profits escape negative territory. Analysts believe that this recovery will continue at least through the first half of 2013, with the mold and die industry benefiting alongside other sectors.
While overall industrial profits have improved, some industries still face challenges such as overcapacity and slow growth. Of the 41 industries surveyed by the National Bureau of Statistics, 29 saw profit increases. However, steelmakers experienced a 37% decline in profits, and chemical companies saw a 6% drop. On the other hand, power generation companies saw a 69% surge in profits, while mold manufacturers and food processing firms reported gains of over 20% and nearly 21%, respectively.
State-owned and state-controlled enterprises saw their profits fall by 5.1% to 1.42 trillion yuan, but private enterprises benefited greatly from the rebound. Their total profit rose by 20% to 1.82 trillion yuan, with private mold companies contributing 36 billion yuan—about 2% of the total industrial profit.
As the industry continues to evolve, the focus on innovation, efficiency, and market expansion is set to drive further growth in the coming years.