Three years Hedong Hexi three years.

Just two or three years ago, energy prices due to upstream and downstream manufacturers continue to squeeze profits. Now, with lower commodity prices upstream, downstream profits among manufacturing enterprises has improved significantly.

Guangdong Provincial Bureau of Statistics recently released data show that in the first quarter of 2014, Guangdong scale industrial enterprises realized a total profit of 113 billion 537 million yuan, an increase of 26.7%, an increase of 1 compared to February increased by 19.2 percentage points, 16.6 percentage points higher than the national average.

From the industry perspective, in the 40 industry statistics, a quarter of Guangdong’s 33 industry gross profit increased, growth amounted to 82.5%. The new profit mainly concentrated in four industries, including computer, communications and other electronic equipment manufacturing industry increased profit of 7 billion 92 million yuan, an increase of 60%, an increase of automobile manufacturing profits 4 billion 583 million yuan, an increase of 68.6%, electrical machinery and equipment manufacturing industry increased profit of 2 billion 672 million yuan, up 35.9%.

A big reason for the profit increase is the main business income growth, but the cost down. Guangdong Provincial Bureau of statistics, a quarter more than the province’s main business revenue grew 7.7%, the growth rate of 1 to February increased by 1.7 percentage points; the main business revenue per hundred dollars of the cost of 85.32 yuan, down 0.36 yuan, equivalent to an increase of about 8000000000 yuan in profits.

The cost of the decline, largely because of the decline in raw material costs. According to the National Bureau of statistics, March producer price, non-ferrous materials and wire prices fell 7.4%, ferrous metals prices fell 5.2%, fuel and power prices fell by 3.1%, chemical raw materials prices fell 2.6%.

“Now Chinese macro economy and overall demand, oversupply.” The economy of the Guizhou provincial government counselor, Guizhou Academy of Social Sciences Institute of Hu Xiaodeng analysis, resources, energy industry to present a fluctuation curve of the bottom, and the market demand of the downstream industry is relatively stable. “The lower prices of upstream products and downstream manufacturing industry is definitely a positive, because the cost benefit ratio increased.”

The price drop in driving the downstream industry profits rose at the same time, also led to a lower upstream end of the energy and chemical industries.