BEIJING: Profits at industrial firms in China declined 22.9% in the first two months of 2023 from the year before, official data showed on Monday, as the factory sector struggles to claw its way out of the slump caused by COVID-related disruptions.

The contraction followed a 4.0% fall in industrial profits for the whole of 2022, data from the National Bureau of Statistics (NBS) showed, pointing to a downbeat start to the year for factories at large.

Industrial profit numbers cover firms with annual revenues of at least 20 million yuan ($2.91 million) from their main operations. The Monday data follows a flurry of economic indicators that show an uneven road to recovery from a bruising three-year battle against the pandemic.

Factory output growth accelerated to 2.4% in January-February, data showed earlier this month. While retail sales swung back to growth, property investment continued to decline despite robust government support aimed at reviving the ailing housing market.

Beijing is seeking to get the economy back on a recovery track and set a modest growth target of around 5% for this year at this month’s annual parliamentary gathering.

China’s central bank this month unexpectedly cut the amount of cash that banks must hold as reserves for the first time this year to help support the economic recovery.