Cost Pressure Has Become The Winter Disaster For Garment Enterprises

The big increase in the cost of raw materials and labor has become "the biggest trouble" of small clothing enterprises, the average since this year

The joint Alibaba group of the National Development Research Institute of Peking University released a report on the survival of small businesses in the Pearl River Delta region. The sharp rise in costs of raw materials and labor has become the biggest trouble for small businesses. The average profit margin this year has dropped by 30% to 40% over the same period, and the average operating rate has dropped to 70%.

However, from the results of the survey, the rise in profits and the decline in profits are the "sharp edges" hanging on the heads of small businesses. The survey results can reflect the problems faced by the clothing industry in the Pearl River Delta.

Compared with last year, the average profit of small garment enterprises in PRD decreased by 30%-40%.

Among them, small businesses represent raw material costs.

According to the clothing industry in Dongguan, the price of raw materials and fabrics in the clothing industry has risen by 30%-80% this year.

The rise in costs has led to less than 5% of the average profit margin of small processing enterprises with "three to one supplement". The overall profitability is reduced by about 40% compared with last year.

Labor cost is also an important factor that can not be ignored.

According to the survey report, the salary of small enterprises in the Pearl River Delta region has increased by 20%-30% over the past year.

At present, the average monthly salary of the workers in the garment industry is more than 2000 yuan -3000 yuan, skilled workers can reach 4000 yuan -5000 yuan, and skilled workers are higher.

While the cost is rising, the shrinking of orders makes small businesses more difficult.

Under the influence of the European debt and the US debt crisis, the reduction of orders from the European and American markets has a greater impact on the small Pearl River Delta enterprises, which are mainly export-oriented economies.

In addition, factors such as rising production costs and RMB appreciation have reduced the export competitiveness of garment enterprises in the Pearl River Delta region.

In the face of difficulties, most of the enterprises with low operating rate are mainly weight reduction, adjust the order strategy, shorten the production cycle, and hope to survive the cold winter.