Textile Industry's Economic Operation In The First Half Of The Year: The Supporting Role Of The Domestic Market Highlights

A few days ago, China Textile Industry Federation held the first half of 2019 textile industry economic operation analysis meeting. The China Textile Federation Industrial Economics Research Institute introduced the textile economic operation in the first half of the year and the trend forecast in the second half of the year. The China Textile Federation International Trade Office introduced the progress of Sino US trade friction and its impact on the textile industry. The China Textile Federation, the chemical fiber Association, the cotton textile association, the printing and dyeing Association and the clothing association respectively introduced the first half of this year's operation and the trend forecast in the second half of the year.

In the first half of 2019, under the background of increasing pressure from inside and outside markets, textile industry's operation indicators such as production, marketing, efficiency and investment fluctuated. The industry persisted in deepening the structural reform of supply side, accelerating the transformation and upgrading, and the boom degree remained in the expansion area, and the economic operation state was generally normal, which was basically consistent with the macro situation and development expectations.

Economic performance of textile industry in the first half of 2019

In the first half of 2019, the textile industry was running steadily and under pressure.

Source: China Textile Industry Federation Industrial Economics Research Institute

In 2019, the domestic and foreign macro situation faced by our textile industry is more and more complex and severe. Various unstable and uncertain factors interweave, which brings multiple challenges to the industry's promotion of high quality development. In the first half of the year, under the background of increasing pressure from inside and outside markets, textile industry's production, marketing, efficiency, investment and other operational indicators fluctuated. The industry insisted on deepening the structural reform of supply side, accelerating the transformation and upgrading, and the boom was maintained at the expansion interval, and the economic operation was generally normal, which was basically in line with the macro situation and development expectations.

Domestic market growth slowed down and export pressure increased.

Since 2019, China's textile and apparel products market has been slowing down steadily, but online retail sales are growing well. According to the National Bureau of statistics, in the first half of the year, the retail sales of clothing, shoes and hats and needle textiles were 656 billion yuan, an increase of 3% over the same period last year. The growth rate slowed down by 6.2 and 0.3 percentage points respectively from the same period last year and the first quarter of this year. The retail sales of apparel products nationwide increased by 21.4% over the same period last year, while the growth rate slowed down 2.7 percentage points over the same period last year. However, it accelerated by 2.3 percentage points from the first quarter of this year, and has returned to a higher level of growth since April.

Affected by the weakening of the international economic recovery and the rising risk of trade environment, the export pressure of textile industry increased significantly compared with the same period last year, and the adjustment of product structure and market structure was accelerated. According to China Customs data, in the first half of this year, China's textile and clothing exports amounted to US $128 billion 400 million, down 2% from the same period last year, and the growth rate slowed down 4.8 and 0.4 percentage points respectively from the same period last year and the first quarter of this year. From the perspective of product mix, upstream chemical fiber, yarn, fabric and other products have become the main driving force for export growth. In the first half of this year, China's textile exports grew by 1% over the same period last year, accounting for 48.2% of the total export volume of the industry, up 4.1 percentage points from 2018, while garment exports fell 4.7% over the same period. The export market structure shows that exports to emerging markets are better than traditional markets. In the first half of this year, China's exports of textiles and clothing to the United States, the European Union and Japan decreased by 0.7%, 4.2% and 4.7% respectively, and their exports to ASEAN, Mexico and Africa increased by 0.8%, 3.9% and 5.2%, respectively.

The overall situation is stable and production is growing steadily.

Since 2019, the boom of the textile industry has continued to expand. According to the survey data of the China Textile Industry Federation, the textile industry boom index was 55 and 52 in the first quarter and the first half of the year, respectively, above the 50 ups and downs, indicating that the industry is still in the growth cycle.

Industry production has achieved steady growth overall. In the first half of this year, the industrial added value of textile enterprises above designated size increased by 3.6% compared to the same period last year, the growth rate was 0.8 percentage points higher than that of the same period last year, but 1.8 percentage points slower than the first quarter of this year. In the various links of the industrial chain, the industrial added value of the chemical fiber industry maintained a two digit figure of 13%, which was higher than that of the high speed growth rate, 6.4 percentage points higher than that of the same period last year. The industrial added value of the textile industry increased steadily, and the growth rate in the first half year was 7.6%.

Operation quality and efficiency pressure has increased, and investment scale has declined slightly.

Since 2019, under the pressure of the internal and external market, the pressure of textile enterprises has increased, the quality of operation has been increased more difficult, and the operating profit margin is rising month by month. In the first half of the year, 34 thousand Textile Enterprises above Designated Size reached 2 trillion and 471 billion 550 million yuan in business revenue, an increase of 3.2% over the same period last year, a slowdown of 0.9 percentage points over the same period last year, a total profit of 103 billion 160 million yuan, a decrease of 4% over the same period last year, and a slower growth rate of 6.4 percentage points over the same period last year, but still better than the national manufacturing profit growth rate over the same period. In all sub sectors, the growth of filaments and printing and dyeing industry benefits the whole industry. The total profit increased by 12.9% and 9.9% respectively over the same period. In the first half of this year, the operating profit margin of textile enterprises above designated size was 4.2%, slightly lower than the 0.3 percentage points of the same period last year, but this year it has been increasing month by month. The profit margin in the first half of this year is 0.5 percentage points higher than that in the first quarter. In the first half of this year, the turnover rate of finished products in textile enterprises above designated size was 15.1 times / year, a year-on-year slowdown of 5.9%; total assets turnover rate was 1.3 times / year, the ratio of three fees was 6.9%, and the asset liability ratio was 56.3%, which was roughly the same as that of the same period last year. The change of industry operation quality indicators shows that the pressure of survival and development of textile enterprises has increased. However, enterprises are still actively accelerating transformation and upgrading, and strive to improve their comprehensive management capabilities, trying to resolve external risks and maintain steady development.

Small scale investment in fixed assets reflects a slight lack of investment confidence. In the first half of this year, the fixed assets investment in textile industry decreased by 1.3% compared with the same period last year, and the growth rate slowed down by 2.6 and 7.8 percentage points respectively over the same period last year and the first quarter of this year. In various sub sectors, the investment in clothing industry increased by 0.8% over the same period last year, the growth rate was 6.5 percentage points higher than that of the same period last year, and the scale of investment increased for 5 consecutive months. The investment in textile and chemical fiber industry decreased by 0.3% and 10.6% respectively. According to the regional perspective, the investment in some provinces in the central part of China has been accelerated. The investment volume of textile industry in four provinces of Anhui, Henan, Hubei and Hunan has increased fairly well, and the growth rate is significantly higher than the national average level.

The development pressure of the whole year is still outstanding, and the supporting role of the domestic market is prominent.

Looking forward to the whole year, the complexity and uncertainty of the domestic and foreign macro environment faced by China's textile industry will not weaken. In the second half of this year, the growth of global economic and market demand is expected to slow down, due to the uncertainty of trade environment and the weakening of US economic growth momentum. Sino US trade relations can hardly be completely alleviated. The trade war does not exclude the possibility of further upgrading. Although it involves only commodity exports to the single market of the United States, the deterioration of the trade environment and the confidence of the market will make the export situation of the textile industry even more severe, and the total export volume will be more difficult to recover in the second half of the year.

Influenced by the international economic and trade situation, the pressure of China's macro-economic operation has also been improved. Although the economic operation will remain at a reasonable level, the growth of residents' income and the improvement of consumer confidence are faced with a certain degree of restrictive influence. In the face of a more severe external situation, the state will pay more attention to policies and regulations, stabilize consumption and investment demand, and promote the formation of a strong domestic market. At the same time, it will further implement the policy of reducing taxes and reducing taxes, and better maintain a reasonable and abundant liquidity, creating a better market space and business environment for the development of the real economy, thus contributing to the formation of a virtuous cycle of increasing corporate profits, increasing investment confidence and expanding consumer demand.

Generally speaking, the external environment facing the textile industry is more complex in the second half of 2019, but our macroeconomic environment and domestic consumption market will still provide the primary development support for the industry. The textile industry will continue to implement the spirit of the nineteen party and the central economic work conference in a comprehensive manner, persist in pushing forward the structural reform of supply side, tap the potential of domestic demand, vigorously promote the development of high quality, further enhance the ability to resist risks and develop resilience, and make every effort to ensure smooth operation. At the same time, the textile industry must correctly and fully understand the complexity of the global economy and trade environment and the long-term nature of risk factors. We should make proper preparations to promote sustained and healthy development of the industry, make contributions to the national economic development and win the goal of building a moderately prosperous society in an all-round way, and offer 70th anniversary tribute to the founding of the people's Republic of China.