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Profits drop in the Pearl River Delta

13/10/2011
An ongoing study into small and medium industrial enterprises in the Pearl River Delta (PRD) region of southern China has found that companies in the area, an important centre for footwear manufacture, are substantially less profitable now than they were a year ago.

National School of Development at Beijing University first carried out a survey of small-scale enterprises in the PRD last year and repeated the exercise this year. It concluded that rising raw material and labour costs, and a fall in orders from customers in Europe and North America, have made a big impact on companies there, leading to a fall in profits of between 30% and 40% for many businesses in the area.

The study also concluded that small and medium-sized manufacturers there are currently running at 70% of capacity on average. The data is based on a survey of 2,889 enterprises in the region with a turnover of less than $5 million.

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