Analysis Of Textile Enterprises' Prosperity Index In The First Quarter Of 2019 (Part 1)

Preface

In order to track the prosperity of textile enterprises in China and understand the confidence of the managers in the industry and the development of their enterprises, we will timely reflect the outstanding problems faced by the managers and the views on the hot issues in the industry, and provide first-hand information for the government to adjust the industrial policies, take measures for the industry organizations, and adjust the production and operation strategies of the enterprises. The Federation of industry continues to carry out the questionnaire survey of managers of textile enterprises.

The thirty-sixth phase of the questionnaire was completed in April 2019. The current survey period is 2019 01~03 months. The questionnaires were distributed and recovered mainly through various professional associations of China Textile Industry Federation, relevant media and direct reporting online. The questionnaire is filled out by the corporate representative or the principal person in charge of management.

With the concerted efforts and concerted efforts of relevant departments, professional associations and supporting media of the China Federation of textile industry, the majority of enterprises have actively participated. Up to the date of the issuance of the report, a total of 217 valid questionnaires have been collected. The index analysis report is formed through data collation, statistics and comprehensive analysis. It will provide reference for relevant government departments, trade associations and business operators to grasp the new trend of industry development and adjust production and operation strategies.

01

Overall prosperity of textile industry

The overall prosperity index was in line with expectations, and the company's confidence in the two quarter increased. According to the current questionnaire survey data, the textile industry boom index in the first quarter of 2019 was 55, which was 2.8 points lower than that of the fourth quarter of 2018. It is expected that the textile industry boom index will be 62.4 in the two quarter of 2019, which is much higher than the current prosperity index, indicating that the industry has strong confidence in the next quarter's industry.

Source: China Textile Industry Federation Industrial Economics Research Institute

From the sub index, the following characteristics are presented.

1, textile production and sales index has declined.

In the first quarter of 2019, the demand for domestic and foreign markets was weak, and the production arrangements of enterprises were greatly affected by factors such as the Spring Festival holiday. The growth rate of China's textile industry slowed down. The production index in the first quarter was only 55.5, down 5.1 points compared with the fourth quarter of 2018, lower than the one or two, three and fourth quarter index in 2018.

Slowing down the pace of production is the level of market demand. In the first quarter of 2019, the new order index was 58.9, down 2 points compared with the fourth quarter of 2018, of which the foreign orders index was 55.6, an increase of 2.6 points over the fourth quarter of 2018, continuing the upward trend of the fourth quarter of last year.

From the domestic and foreign market performance, domestic sales growth slowed down in the first quarter, and exports were the trend of reversing negative growth (US dollar). In 2019 1~3, the retail sales of clothing, shoes and hats and needle textiles increased by 3.3% over the same period last year. The growth rate was 4.7 percentage points lower than that in 2018. The total export volume of textiles and clothing was 56 billion 331 million US dollars, down 1.78% compared with the same period last year. In terms of RMB, the export of textiles and garments was 385 billion 210 million yuan, an increase of 3.34% over the same period last year.

2, product sales prices decline, raw material purchase prices rise

In the first quarter of 2019, the sales price index of products dropped and the purchase price index of raw materials increased. It can be seen that the cost of raw materials in China's textile enterprises has been raised, but it has not been transmitted to the price of the products synchronously, resulting in the squeezing of the profits of the enterprises.

It is estimated that the purchasing price index of raw materials in China's textile industry is 66.9, up 2 points over the fourth quarter of 2018. Over the same period, the price index of product sales was only 52.1, down 1.3 points compared with the fourth quarter of 2018. According to the National Bureau of statistics, the producer price of textile and clothing industry increased by 1.4% and 1.3% in the first quarter compared with the same period last year, and the chemical fiber industry decreased by 0.6% compared with the same period last year. The purchasing price of textile raw material industrial producers increased by 1.4% over the same period last year.

3, raw material inventories and finished goods inventories have declined.

In the first quarter of 2019, the raw material inventory index of China's textile industry was 49.5, down 3.6 points compared with the fourth quarter of 2018. Finished goods inventory index was 44.1, down 6.5 points in the fourth quarter of 2018. It can be seen that in the first quarter, China's textile production enterprises slowed down, and the inventory was more positive.

Overall, China's textile industry's overall prosperity index is in line with expectations due to factors such as market slowdown. With the gradual improvement of the domestic market environment, the relevant policies to play the policy effect, there will be room for recovery in the two quarter, and enterprises' confidence in the two quarter will be enhanced. Specifically, the change of the main sub indicators in the first quarter of 2019 over the fourth quarter of 2018 and the expectation for the two quarter are as follows:

Source: China Textile Industry Federation Industrial Economics Research Institute

02

Basic situation of sample enterprises

In this period, 217 effective sample enterprises, from the regional distribution structure, the sample enterprises are mainly concentrated in the eastern region, accounting for 90.3%; from the scale of enterprises, the majority of medium-sized enterprises account for 43.8%; from the perspective of enterprise type, private holding enterprises are the majority, accounting for 65.9%; from the industry category, the enterprises in cotton spinning, home textile and garment industry account for a relatively high proportion. The distribution of specific samples is as follows:

Source: China Textile Industry Federation Industrial Economics Research Institute

03

Production and operation of enterprises

For the first quarter of 2019, the overall situation of production and operation of the enterprises was 41.7%. The enterprises chose "good", which was 5.5 percentage points lower than that in the four quarter of 2018 when the enterprises chose the "good" ratio (47.2%), and clearly stated that the "poor" business was 7.9%, which was 2.9 percentage points higher than that in the fourth quarter of 2018. It can be seen that the overall business pressure of enterprises in the first quarter is not small.

From the point of view of regional distribution, the proportion of enterprises in the central and western regions to choose "good" is higher than that in the eastern region. From the point of view of the sub sectors, the proportion of industrial, chemical and textile enterprises to choose "good" operation is more than 50%, and the management situation is relatively optimistic. Judging from the type of enterprises, the proportion of small and medium enterprises choosing "good" is slightly higher than that of large enterprises.

Source: China Textile Industry Federation Industrial Economics Research Institute

Note: the proportion of each option exclude the data of enterprises that are not selected (the following tables are the same).

1. the demand for this order is not strong. We are optimistic about the next market.

About 40.8% of the enterprises' orders (demand) increased compared with the previous period, while the proportion in the previous survey was 46.9%. About 38.2% of the enterprises' orders (demand) were unchanged from the previous period. Overall, the volume of enterprise orders declined in the first quarter of 2019 compared with the previous period, reflecting the overall demand for the market in the first quarter.

Source: China Textile Industry Federation Industrial Economics Research Institute

The number of foreign orders (demand) increased by 31.9% in the current period, compared with 28.7% in the previous survey. Overall, the demand for foreign orders increased slightly over the previous period.

Source: China Textile Industry Federation Industrial Economics Research Institute

For the next order demand, 43.3% of the enterprises are expected to increase over the current period. It can be seen that enterprises are optimistic about market demand in the two quarter of 2019. Among them, chemical fiber, knitted, and industrial enterprises have a positive attitude towards the next order judgment, and expect that the proportion of the next order increase will exceed 50%.

Source: China Textile Industry Federation Industrial Economics Research Institute

On the next stage of international market demand, 32.5% of enterprises believe that the next order will increase. Thus, enterprises are cautiously optimistic about the international market demand in the two quarter of 2019. Judging from the sub sectors, the knitting enterprises hold relatively optimistic expectations for the international market in the next quarter. It is expected that the proportion of foreign orders growth will be 50% next time, and other industries are expected to be relatively cautious about the international market.

Source: China Textile Industry Federation Industrial Economics Research Institute

2. this period of production slowdown, optimistic expectations for the next period.

Judging from the production volume of the main products of this period, only 36.9% of enterprises choose to increase production over the previous period, and the proportion in the previous survey is 44.4%. It can be seen that the production of textile enterprises in the first quarter of 2019 slowed down compared with the four quarter of 2018.

From the perspective of enterprise size, the proportion of medium-sized enterprises' production increased more than that of large and small enterprises. From the point of view of the sub sectors, the proportion of industrial enterprises choosing output increases more than 50%.

Source: China Textile Industry Federation Industrial Economics Research Institute

For the two quarter of 2019, the proportion of the main products produced by enterprises is expected to increase by 46%, which is higher than the proportion of the growth of the main products in the current period (36.9%), and the enterprises are optimistic about the future production.

Source: China Textile Industry Federation Industrial Economics Research Institute

3. the current price of products increased and inventory pressure was released.

The average selling price of the main products of 24.1% of the sample enterprises increased compared with that of the previous period, and 19.9% of the sample enterprises had a decrease in the price of their main products, indicating that 56% of them were flat. Overall, the product sales price index slightly decreased compared with the fourth quarter of 2018.

Source: China Textile Industry Federation Industrial Economics Research Institute

For the next product sales price judgement, it is estimated that the sales price of the next product will be 70.7% of the sample period, and only 15.3% of the enterprises will expect the sales price to rise. It can be seen that entrepreneurs generally believe that the two quarter of product sales prices to raise space is limited.

In terms of finished goods inventory, the survey results show that the proportion of stocks in the current period has increased or basically flat compared with the previous period, accounting for 75.7%. The proportion of inventory decline was 34.3%, while the proportion of stock raising or steady selection in the previous period was 74.2%. Overall, the inventory pressure of finished products in the sample enterprises has been released.

From the point of view of industries, silk, chemical fiber, knitted and woolen textile enterprises have a large stock of finished products, and the proportion of finished goods inventory dropped by more than 50%.

For the next stage of finished product inventory, the proportion of sample enterprises with reduced inventory is 30.7%. Sample enterprises are relatively optimistic about the inventory of finished products.

Source: China Textile Industry Federation Industrial Economics Research Institute

4. the current profit slightly rose, optimistic about the next stage of expectations.

In terms of corporate profitability, 75.8% of the sample enterprises increased or flat in the current period, slightly higher than the previous sample enterprises. From the scale of different enterprises, the profit growth of large and medium-sized enterprises is above the average level, and the profit growth of small enterprises is slightly less than 28.4%.

For the two quarter of 2019, the proportion of enterprises expected to increase profits is 37.8%, which is 4.8 percentage points higher than that of the current period. It shows that the sample companies are optimistic about the two quarter earnings forecast.

Source: China Textile Industry Federation Industrial Economics Research Institute

5. the utilization rate of production capacity is increasing, and the utilization rate of cotton spinning enterprises is the highest.

In terms of capacity utilization level, the utilization ratio of equipment capacity of 69.7% of the sample enterprises remained above 80%, a slight increase of 0.9 percentage points over the previous period. The utilization ratio of equipment in large and medium-sized enterprises is higher than that in small enterprises, and the proportion of enterprises whose equipment utilization rate is above 80% is 84.9% and 74.5% respectively. From the point of view of the sub sectors, the utilization ratio of equipment in cotton spinning, industrial use, filament weaving and chemical fiber industry is more than 80%, accounting for more than 70%, and the capacity utilization rate of the sample enterprises in the cotton spinning industry reaches 95.6%.

Source: China Textile Industry Federation Industrial Economics Research Institute

6. the stock of raw materials is down this season, which is slightly positive for the next period.

In terms of raw material purchase volume, 24.3% of the sample enterprises increased their purchasing volume, down 4.5 percentage points compared with the previous period. On the whole, the enthusiasm of raw materials for this phase of production is lower than that of the previous period.

For the next estimate of raw material purchase, 36% sample enterprises choose "increase", which is higher than the expected increase of the sample enterprises. Therefore, the sample enterprises have a positive attitude towards the raw material preparation.

Source: China Textile Industry Federation Industrial Economics Research Institute

Source: China Textile Industry Federation Industrial Economics Research Institute

To be continued