Cost Rises &Nbsp; Textile Industry Is Showing Signs Of Weakness.

Since the beginning of this year, China's textile industry has continued to stabilize and rebound since the two quarter of last year. The industry's production has maintained a relatively rapid growth of more than 20% on the basis of last year's low base.

However, due to the slow pace of demand recovery in the international market at this stage, the growth of domestic demand market for textile and clothing has slowed down slightly. At the same time, the pressure of rising cost of the industry this year has been steadily increasing. In addition, the factors such as the base period of the same period last year have made the textile industry of China show signs of weakness in the track of total body recovery in 1~4 months.

Cost rising pressure bear the brunt

Although the performance of industry growth is weak due to the co influence of multiple factors, the continuous increase in cost pressure is undoubtedly the primary factor.

First of all, the cost of raw materials in China's textile industry has been rising rapidly this year due to the combined supply of raw materials such as cotton and other raw materials, the pursuit of some market funds and the rising cost of cotton planting.

At this stage, with the gradual consumption of raw materials in the early stage, the cost pressures of high priced raw materials purchase have begun to appear, which has further affected the further recovery of enterprises' production.

According to the relevant data, by June 2nd, the 328 grade cotton in China has risen to 17591 yuan / ton, up 37.10% from the 2009 average price (12831 yuan / ton), and the import grade cotton reached 91.11 cents / pound, which was 31.85% higher than the average price of 2009 (69.1 cents / pound).

At the same time, the price of polyester staple and viscose staple fiber was higher than that in 2009, and April 2010.

Major since 2009

According to the data of China Federation of logistics and purchasing, China's Manufacturing Purchasing Managers Index (PMI) was 55.7% in April 2010, and it has been in the last 14 months at a watershed of over 50%. The price index of raw materials purchasing has risen by 72.6%, the highest point since July 2008.

Among them, textile and other industries, the main raw material purchase price index even jumped to more than 80% of the high.

It can be seen that the pressure of rising cost of raw material purchase is very prominent at this stage.

Secondly, labor costs continue to rise, further increasing the pressure of business operation.

Since the beginning of this year, more than 10 provinces and autonomous regions such as Guangdong, Shandong and Jilin have raised the minimum wage standard, with an average increase of about 17%. China has entered the minimum wage adjustment year.

In recent years, the Foxconn jumping incident has also been repeatedly tried to resolve by Foxconn's 30% pay increase.

The rise of minimum wage and the increase of enterprises' wages show that China has entered the general upgrading range of labor costs, which is more heavy for the labor-intensive textile industry.

In addition, fuel power costs and pportation costs continue to rise.

In 2010 1~4, the fuel price index of industrial enterprises increased by 23.6% compared to the same period last year, increasing by 0.1 percentage points compared with the first quarter.

It can be seen that the continuous rising of the prices of production factors has become a prominent problem facing the operation of the industry at this stage.

There are hidden dangers both inside and outside the market.

At the same time, while the pressure of rising cost is prominent, the demand of domestic and foreign market of textile industry is also more complicated. The recovery of external demand is still difficult and the growth rate of domestic sales has dropped, which also forces enterprises to adjust their pace and slow down the pace of production.

At present, the United States is at a stable recovery stage in the world's largest economy, and its main macroeconomic indicators have shown a good trend as of April.

But another important economy, Europe, is suffering from the sovereign debt crisis, and the recovery is slow.

According to the latest statistics from the European Union statistics bureau, the unemployment rate in the euro area increased from 10% in March to 10.1% in April, the highest level since June 1998.

So far, the total number of unemployed people in the euro area has reached 15 million 900 thousand.

The high unemployment rate will continue to affect European residents' consumer confidence and spending expectations.

As the first target market of China's textile industry, the downturn of European consumption will definitely affect the export of China's textile and clothing products.

Meanwhile, the euro has depreciated 16% against the yuan since the beginning of this year, and the impact of exchange rate factors on the export of textile and clothing products will also become more apparent.

While the recovery of the external demand market is still difficult, the growth of the domestic market has also slowed down.

According to the statistics of the National Bureau of statistics, the total retail sales of consumer goods in China in 2010 1~4 amounted to 47884 billion yuan, an increase of 18.1% over the same period last year, 3.1 percentage points faster than the same period last year, 0.2 percentage points faster than the first quarter, of which the retail sales of clothing commodities above the limit were 189 billion 700 million yuan, an increase of 23.3% compared with the same period, higher than that of the same period, while the total retail sales of social consumer goods increased by 5.2 percentage points, but slowed down by 0.6 percentage points over the first quarter.

According to the Ministry of Commerce's monitoring data of a thousand key circulation enterprises, the retail sales of clothing increased by 14.6% in April compared with the same period in March, and the growth rate dropped by 0.8 percentage points over that of March.

One side of the cost pressure continues to rise, the other side of the market demand has slowed down, coupled with the same period last year base comparison factors, resulting in the current industry production fatigue performance.

According to the statistics of the National Bureau of statistics, in 2010 1~4, the total output value of China's textile industry above 5.35 000 scale enterprises totaled 1 trillion and 296 billion 542 million yuan, up 26.69% from the same period last year, and the growth rate was 22.43 percentage points faster than that of the same period last year.

However, the output growth of 1~2 and 1~3 months in 2010 decreased by 0.36 percentage points and 0.29 percentage points respectively, reflecting the weakness of industrial production in the current stage.

From the perspective of sub sectors, in 2010 1~4 months, the cotton textile industry achieved a total industrial output value of 352 billion 133 million yuan, an increase of 27.35% over the same period last year, a slower growth rate of 0.53 percentage points compared with the 1~3 months of this year (27.88%), and the total value of industrial output of the chemical fiber industry reached 143 billion 566 million yuan, an increase of 41.47% over the same period last year, and the growth rate slowed down 3.47 percentage points compared with 1~3 (44.94%) this year. The apparel industry achieved a total industrial output value of 350 billion 413 million yuan, an increase of 22.41% over the same period last year, and the growth rate slowed down by 22.41% percentage points over that of 1~4 months (22.68%).

Whether it is the performance of output growth in different sectors or the contribution of industries to the growth of the whole industry, they all show a slowdown in the growth of the industry, a decrease in their contribution, and a continuous improvement in the contribution of the sub sectors.

It can be seen that the cost pressure of the industry is also reflected in the industry link of the industry chain.

But if the cost pressure continues to rise, the problem can not be alleviated or released from other channels, and the pace of production in China's textile industry will continue to slow down.

In this regard, we suggest that the relevant departments of the state strengthen the macro regulation of cotton and other raw material markets, including expanding cotton imports and timely launching of national cotton reserves, so as to stabilize the price of raw materials market and ease the cost pressure of enterprises.