Profits at China’s industrial companies rose at a much slower pace in October than the prior month as deflationary pressures persisted, suggesting the economic recovery remains fragile in the final stretch of 2023.

Industrial profits increased 2.7% from a year ago, according to data published by the National Bureau of Statistics on Monday. The pace eased significantly from September’s 11.9% gain and August’s 17.2% jump.

For the first 10 months of 2023, profits fell 7.8% from the same period a year earlier, moderating slightly from the 9% fall through the first nine months.

Companies in China have finally started to see improving profits as the government stepped up economic stimulus, while a destocking cycle at firms is also likely nearing an end. But there are still lingering weaknesses within the world’s second-largest economy that are weighing on activity. Manufacturing activity contracted last month and the years-long property slump remains a drag. And while factory-gate deflation had been easing in recent months, prices still dropped 2.6% last month from a year ago.

Other indicators showed a mixed performance for China’s economy in October. While consumer spending picked up, those figures were aided by a favorable comparison to lockdown-hit 2022. A deepening contraction in property investment has fueled expectations the government will have to roll out more stimulus.

Policymakers are finalizing a draft list of developers eligible for financial support — indicating a pivot by Beijing to help some of the most distressed builders — while banks have been asked by lawmakers to increasing funding for the sector.