Profits of China's major industrial firms dropped 1.1 percent year on year in the first five months of the year, official data showed Friday.

Industrial firms with an annual main business revenue of at least 20 million yuan saw their combined profits reach 2.72 trillion yuan during the January-May period, according to the National Bureau of Statistics (NBS).

The figure represents an increase of 603.41 billion yuan compared with the total profits recorded in the January-April period. Operating revenue of these firms rose 2.7 percent year on year, and the steady growth is expected to support a continued profit recovery in the coming months, the NBS said.

In May, industrial profits fell 9.1 percent from a year earlier, snapping a two-month growth streak, official data showed.

The profit decline was due to "insufficient effective demand, declining prices of industrial products and fluctuations in short-term factors," said NBS statistician Yu Weining in a statement.

Profits at state-owned firms dropped 7.4 percent in the first five months. Private-sector companies recorded a 0.3 percent increase and foreign firms saw a 3.4 percent rise, according to a breakdown of the official data. (Xinhua/Reuters)