Profits at China's industrial firms shrank at their fastest pace in eight months in October, tracking sustained drops in producer prices and exports and underscoring slowing momentum in the world's second-largest economy.

Industrial profits fell 9.9% in October year-on-year to 427.56 billion yuan ($60.74 billion), data released by the National Bureau of Statistics showed on Wednesday, marking the biggest drop since January-February period and compared with a 5.3% decline in September.

China's industrial sector has been under pressure in recent months as slowing demand at home and the fallout from the Sino-U.S. trade dispute undercut earnings.

"The big drop in October profits suggests the real economy is still facing plenty of difficulties," said Nie Wen, economist at Shanghai-based Hwabao Trust, adding that the country's industrial firms now face a double whammy of falling prices and higher funding costs.

"Profit growth is expected to stay negative for a period of time in the future, likely prompting authorities to unveil more growth-boosting measures in a gradual and restrained way."

Profit declines for the manufacturing sector deepened in October, as margins contracted by 4.9% in the January-October period, compared with a 3.9% drop in the first nine months of the year. Meanwhile, mining sector profit growth also moderated.

For January-October, industrial firms' profits fell 2.9% from a year earlier to 5.02 trillion yuan, compared with a 2.1% decline in January September.

China's producer price index, seen as key indicator of corporate profitability, posted its sharpest fall in more than three years in October as prices for raw materials weakened. The country's official manufacturing PMI also showed a contraction in activity for the sixth straight month in September with new export orders falling for their 17th straight month.

China's exports fell in annual terms for the third straight in October, albeit at a slower-than-expected rate.