According to the latest data released by the National Bureau of Statistics, in May, the profits of industrial enterprises above designated size across the country fell by 12.6% year-on-year, a decrease of 5.6 percentage points from the previous month, narrowing for three consecutive months, showing a steady recovery month by month. Among them, the profits of the manufacturing industry, especially the equipment manufacturing industry, have maintained rapid growth, driving the profits of industrial enterprises above designated size to increase by 4.6 percentage points, making it the industry that currently contributes the most to the improvement of industrial profits. This can also be confirmed from the contribution rate to industrial growth above the designated size. In the first five months, the added value of the equipment manufacturing industry increased by 6.8% year-on-year, and its contribution rate exceeded 70%. From the perspective of emerging industries, the production and sales of new green commodities are booming, driving the corresponding double-digit growth in manufacturing profits. The steady improvement of industrial profits is conducive to enhancing confidence and expectations. Through the increase in income and consumption, it will promote the expansion of reproduction, and then drive the entire economic cycle.
The recovery of the service industry is the highlight of the current economic operation. In the first quarter, the added value of the service industry increased by 5.4% year-on-year. It is expected that the growth rate will further expand in the second quarter. Its contribution to GDP growth has expanded to about 70%, and it is an important force supporting economic recovery. The main reason is that the contact service industry has improved significantly. In the first five months, the national service industry production index increased by 9.1% year-on-year, 0.7 percentage points faster than the previous four months. According to data released by the Ministry of Culture and Tourism, more than 100 million domestic tourists traveled during the Dragon Boat Festival holiday, 1.1 times more than the same period in 2019. In addition to accommodation, catering, and cultural tourism consumption, the production and sales cycle of the footwear market has also accelerated significantly, and profitability has improved significantly, which has become one of the important factors that have boosted the narrowing of the decline in the profit of the consumer goods manufacturing industry.
Based on the prediction results of the service industry and industrial development trends, it is expected that the GDP growth rate in the second quarter will be significantly larger than that in the first quarter, and the expected growth target of about 5% is expected to be achieved for the whole year.
Objectively speaking, there are still some pressure points in internal and external demand. On the one hand, the external environment is more complex, and the pressure of external demand contraction is still relatively large. According to the latest forecast of the International Monetary Fund (IMF), the growth rate of developed economies this year has slowed down significantly, and the average growth rate is expected to be only 1.3%, which may have a negative impact on my country's stability. Foreign trade has brought some disturbances. On the other hand, domestic demand is still obviously insufficient. Affected by multiple factors, the recovery of relevant indicators of the real estate market has slowed down recently, and the retail sales of residential consumer goods such as home appliances, furniture, construction and decoration have relatively slow recovery. In this regard, mortgage interest rates fell again in late June, covering new and existing loans, first- and second-home loans. At the same time, some places supported the orderly release of rigid and improved housing demand by relaxing restrictions on house purchases and optimizing provident fund policies.
On the whole, in the first half of the year, the foundation for economic recovery continued to consolidate, and the positive factors supporting the balanced recovery of the economy increased significantly. Recently, international organizations have continued to raise my country's economic growth forecast for this year. The number of foreign-invested enterprises in China has increased. Many multinational companies have newly established or added production lines, and have put higher value-added industrial sectors in China, which shows that they attach great importance to China. With great market opportunities, expectations for China's economic recovery have been significantly enhanced.
Looking forward to the second half of the year, we must focus on promoting the continued consolidation and recovery of the economy, increase the intensity of macro-policy regulation, and promote the coordinated linkage of various regulation policies to maximize the release of comprehensive effects. As far as the service industry is concerned, it is expected that it will usher in a period of accelerated development on the basis of rapid recovery. The urgent need for the deep integration of manufacturing and service industries and green and low-carbon transformation will promote the expansion of the producer service industry and the optimization of its structure, and the diversified needs for a better life will also lead to the improvement of the quality of the life service industry. The key is to further remove some hidden barriers in the links of market access and business operation, and focus on promoting the release of the potential of the service industry and the balanced development of business forms. As far as the manufacturing industry is concerned, it is necessary not only to promote high-end green upgrades, but also to increase support for labor-intensive manufacturing industries, to better combine employment and industry stability, to improve the professional skills of workers, and to optimize work. Environmental and labor security conditions allow industrial workers to have more decent jobs and attract more young people to work in the manufacturing industry. In addition, for the possible impact of unfavorable weather such as high temperature in summer and local rainstorms on production and circulation, it is necessary to track and warn in time, enhance emergency response capabilities, and ensure the stable production and supply of important livelihood commodities and basic energy.
To continuously enhance the endogenous driving force of economic development, the key lies in promoting consumption and stabilizing the expectations of the main body. On the one hand, it is necessary to implement various measures that have been introduced to support the expansion of consumption, to provide a richer and more diversified supply of high-quality goods and services for different income groups, and to better match the diverse consumption needs of residents, including the promotion of shoes and clothing. Transform and upgrade the consumer goods industry, develop towards branding and high-end quality, innovate consumer service scenarios, and vigorously promote the consumption of health-related services. On the other hand, it is necessary to further create a fair, transparent, and expectedly stable institutional environment, maintain the stability and continuity of policies, expand the space for the development of the private economy, and boost the confidence of private enterprises, thereby enhancing their ability to create jobs and optimize the employment structure. The role of consumption is to accelerate the recovery of consumption by stabilizing employment and promoting income growth.