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Labor and material prices have dipped "anywhere from 5to10percentent at a minimum," depending on the trade.
"While Procter is expecting the third quarter to be down, can you really believe they are going to recover as quickly as they say they are?" She added: "Clearly, raw material prices have risen.
After deducting all costs Messrs Hofman and Kuijs reckon that profit margins have risen from less than 3% in 1999 to almost 6% in 2005.But surely Mr Shan has a point: how can profit margins increase when wages and raw material prices have been rising so rapidly?
"Raw material prices have so far been stable, but we have had to increase worker wages by 20 percent," said Kevin Mao, the export business manager at the Zhejiang Zhongli Group, a manufacturer of bicycle and motorcycle locks in Wenzhou in east-central China.
Raw material prices have backed off.
Soaring raw material prices have led global food organizations and manufacturers to accuse speculators of distorting markets.
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A report by the Institute for Supply Management, which found that raw material prices had risen in March, added to investor concerns.
Oil jumped more than $5 a barrel on Thursday and the dollar fell against the euro and the yen as raw material prices had one of their biggest bounces in weeks and financial stocks lingered in the red.
Meanwhile, a combination of global warming and soaring raw material prices has seen a sudden revival of 50-year-old territorial aggrandisement, straining the agreements that govern the status of the polar regions.
Ravitz, who expected Dow to earn 10 cents in the first quarter, says Union Carbide believed market prices would modify to the current increases raw material prices had, making hedges obsolete.
Ravi Kant, the firm's boss, insists that earlier predictions that it will lose money on the Nano are wide of the mark: raw-material prices have helpfully fallen, a recent excise cut from 16% to 8% is not being passed on to customers and the majority of Nanos sold are likely to be the fancier, more profitable models.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com