BEIJING, July 27 Reuters Profits at China39;s industrial firms bounced back to growth in June after two months in the red, underpinned by the resumption of activity in major manufacturing hubs, but fears of a COVID19 resurgence have cast a shadow over future factory output.

Profits in June grew 0.8 from a year earlier, rebounding from a 6.5 decline in May, National Bureau of Statistics NBS data showed on Wednesday.

Buoyed by easing pandemic curbs and government stimulus, June39;s data shows industrial firms are gradually coming back from painful supply chain disruptions in the second quarter.

The recovery in profit growth was driven by a pickup in demand, said Zhou Maohua, an analyst at China Everbright Bank, adding it led to strong profit growth in the upstream sector.

Profitability in the middle and downstream manufacturing sectors, as well as producers of electricity, heat, gas and water, also improved, he said.

NBS Senior Statistician Zhu Hong said in a statement that as the pandemic was effectively controlled and the industrial chain further recovered, industrial firms39; efficiency improved markedly.

Profits of industrial firms in the COVIDhit Yangtze River Delta region rose 4.6 in June following a 17.8 slump in May.

Profits of auto producers jumped 47.7 as production resumed in the major auto manufacturing hubs of Shanghai and northeastern Jilin province, with the sector being the biggest driver of the profit rebound among industrial firms, Zhu said.

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