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S&M Enterprises Profits Drop in the First Three Quarter

Published time:2016.10.28

The survey is conducted on the Small and Medium industrial enterprises which are defined as businesses with main income less than 20 million yuan. According to the sample survey of 78 enterprises sampled in the whole region, in 2016, enterprises were affected by the increase of production cost, intensified resource constraints, weak market demand and so on, and their economic benefit decreased.
First, the enterprise profit level drops

The questionnaire shows that the main business revenue of 78 enterprises was 304.357 million yuan, up by 20.1% over the same period of last year, while the cost of main business increased by 25.9%. The total profit was affected by the increase of production cost, the profit level decreased and the profit decreased year on year by 15.4%.
Second, enterprises reduce employment

The survey shows that the number of employees in the industrial enterprises below designated size is 1128, down by 15.6% over the same period of last year. In this quarter, there were 64 enterprises with no recruitment demands, accounting for 80% of the enterprises surveyed.
Third, the main problems in the S&M industrial enterprises are:
1, the market demand is insufficient. According to the survey, 45 enterprises face the problem of insufficient demand, accounting for 57.7% of the surveyed enterprises. Affected by weak domestic and foreign markets, many products are faced with down declining sales volume and number of new orders compared with the same period last year.
2, labor costs rise. Enterprise labor costs are rising fast, squeezing the profit margin. The survey results show that 28 enterprises claimed the labor costs rise faster, accounting for 35.9% under the survey.

3, rising raw material costs. The survey results show that 18 enterprises are dealing with high raw material costs accounting for 23.1%, and the prices of various raw materials increased in different degrees compared with last year. With the rise in the price of transport, the operation cost of the enterprises increases while squeezing a portion of corporate profits.
Fourth, the company expects stable production in the fourth quarter

The survey results show that the next quarter, seven enterprises, is expected production growth next quarter accounting for 8.9% of the region. 54 enterprises are expected steady production next quarter, accounting for 69.2%. This shows that the next quarter is expected to have an equal growth rate as this quarter.