(CNBC). China experienced an increase in production costs as the producer price index rose to 9% in May, the fastest since the 2008 index of 9.13%.
Building, iron, and steel sector managers predict a sharp increase in costs to the year-end, while other firms are hopeful prices will stabilize in the near future.
A survey of 2000 companies in the industrial sector conducted in March and April revealed 70% of companies are getting a gross profit margin lower than 15%.
The government has come up with support mechanisms for small businesses worst hit by increased raw material prices.
Reduced overseas purchases are also a concern for Chinese manufacturers.
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