Analysis Of Economic Operation Of Garment Industry In The First Half Of 2019

Since 2019, the growth of world economy and the growth of international trade have been slowing down. The external uncertainties are increasing, and the domestic economy is generally stable. However, pressure is still on the face of some structural problems. Under the background of many risks and uncertainties, China's garment industry has been actively carrying out structural adjustment and pragmatic innovation, accelerating the transformation of growth momentum. Although domestic and international market pressures have increased and operation quality and efficiency fluctuated slightly, the industry has maintained a basically stable development trend and entered a new round of strategic restructuring and accumulation.

1. Operation of the industry

(1) clothing production is basically stable.

The industrial added value of garment industry has maintained a low growth rate, and its growth rate has slowed down. According to the National Bureau of statistics, the growth rate of garment industry added value in 1-6 was 3%, down 1.5 percentage points from the same period in 2018, higher than that of the textile industry by 1.1 percentage points, lower than the industrial growth rate by 3 percentage points.

Clothing output fell slightly. According to the National Bureau of statistics, in 2019 1-6, garment enterprises above Designated Size completed 10 billion 413 million garment production, down 1.09% from the same period last year, a decrease of 6.14 percentage points over the same period last year. Judging from the output of sub category garments, knitted apparel production is obviously better than that of woven garments, knitted garments 5 billion 539 million, an increase of 1.02% over the same period, and 4 billion 865 million pieces of woven garments, down 3.38% from the same period last year. The down garments, suits and shirts decreased by 0.40%, 3.57% and 6.01%, respectively.

(two) negative export growth

Since 2019, the pressure of international market demand is insufficient, trade protectionism has intensified, global market competition has become increasingly fierce, and the traditional advantages of China's garment industry have been weakened, and new competitive advantages have not been established. According to the customs statistics, in 2019 1-6, the export volume and price of garments and accessories were reduced, and the export volume was 66 billion 574 million US dollars, down 4.68% from the same period last year. The number of garment exports was 14 billion 132 million, down 1.03% from the same period last year. The average price of clothing exports was 3.64 US dollars / piece, down 4.71% compared to the same period last year.

1, weak exports to the US and other major markets declined significantly.

According to China Customs statistics, in 2019 1-6, China's clothing exports to the United States amounted to US $15 billion 328 million, an increase of 0.11% over the same period last year. Exports to the EU, Japan and ASEAN fell by 6.56%, 6.11% and 6.73% respectively. The total export volume of the above four main markets totaled 41 billion 216 million US dollars, down by 4.13% over the same period last year, accounting for 61.91% of the total export volume of clothing.

2, some parts of the country along the road garment export highlights.

In the 1-6 month of 2019, China exported 15 billion 494 million US dollars to 65 related countries (regions) along the belt along the way, down 5.26% from the same period last year, accounting for 23.27% of the total export volume of clothing in China. China's clothing exports to Philippines, Saudi Arabia, Greece, Kazakhstan and other six countries maintained a different range of growth, of which Saudi Arabia, Greece and Kazakhstan increased by 54.22%, 150.28% and 28.49% year-on-year, and the export volume of the above six countries was 2.03 percentage points positive for the overall export of garment industry.

3, Guangdong is decreasing obviously, and the central provinces are on the contrary.

In the 1-6 months of 2019, the top five provinces and cities of China's clothing export completed 50 billion 757 million US dollars in clothing exports, down 5.08% from the same period last year, accounting for 76.24% of total exports. Among them, the decline in Guangdong was obvious; Zhejiang and Jiangsu declined slightly, while the export of Fujian and Shandong continued to grow at a low speed. In central provinces and cities, clothing exports in Anhui, Hunan, Hubei and Henan showed two digit growth, and Hunan province grew fastest, with an increase of 67.96%.

(three) domestic sales growth is stable and slowing down.

Since 2019, clothing sales have been growing, but the growth rate has dropped sharply due to factors such as consumer confidence, consumption concept, consumption classification and matching degree of supply. According to the National Bureau of statistics, in 2019 1-6, the total retail sales of social consumer goods amounted to 195210 billion yuan, an increase of 8.4% over the same period last year, and the growth rate dropped 1 percentage points over the same period last year. Among them, the retail sales of clothing commodities above the quota reached 475 billion yuan, an increase of 2.7% over the same period last year, down 7.4 percentage points from the same period last year.

Apparel online retail sales maintained a two digit rapid growth. Among them, wear commodities increased by 21.4% compared to the same period last year, and the growth rate dropped 2.7 percentage points over the same period last year.

In traditional channels, the sales volume of large retail enterprises rises or falls, and sales growth turns negative. According to the statistics of the China National Business Information Center, in 2019 1-5, the retail sales of clothing commodities in major large-scale retail enterprises decreased by 6.64% compared to the same period last year, down 13.08 percentage points from the same period last year, and the retail sales of all kinds of clothing increased by 1.37% over the same period last year, an increase of 0.06 percentage points over the same period last year.

(four) a slight increase in investment

According to the statistics of National Bureau of statistics, the actual investment in garment industry in China in 2019 1-6 increased by 0.8% compared with the same period last year, but 6.5 percentage points higher than the same period last year, but it dropped 10.6 percentage points in the 1 quarter. In the new stage of the development of the industry, the direction of investment in enterprises has changed, and the investment in clothing industry shows the characteristics of reducing the scale of individual projects. At the same time, due to the shift of orders, more enterprises have increased overseas investment.

(five) slight fluctuations in quality and efficiency.

Industry efficiency has declined and operation quality has been basically stable. In the 1-6 month, the growth rate of garment industry's performance indicators showed a significant slowdown, operating income maintained a small increase, and total profit growth was negative. According to the statistics of National Bureau of statistics, in 2019 1-6, 13636 enterprises in the garment industry (above 20 million yuan and above) accounted for 761 billion 583 million yuan, an increase of 2.15% compared with the same period last year, with a total profit of 38 billion 245 million yuan, a decrease of 0.78% compared with the same period last year. The operating income margin was 5.02%, a 0.15 percentage point lower than that of the same period last year. The turnover rate of finished products and total assets decreased by 3.89% and 0.05%, respectively.

Two, the main factors affecting the development of the industry

(1) the growth momentum of international market demand is insufficient.

Global trade growth has been slowing down due to weak global economic growth, financial market volatility and tightening monetary policy in developed countries. According to the WTO report, Global trade grew by 3% in 2018, 1.6 percentage points lower than that in 2017. At the same time, Global trade growth in 2019 was only 2.6%, the lowest growth rate since 2008 in the global financial crisis. From the three major garment export markets in the US, EU and Japan, the slowdown in economic growth and the fall in consumer confidence index have adverse effects on clothing sales.

(two) intensified competition in the international market

Since 2019, the total import volume of garments in the EU and the United States has maintained a slight increase, while Japanese clothing imports have declined slightly, while the growth rate of the three largest market imports from China is obviously lower than that of the global import. According to the latest data on clothing imports released by the European Union statistics bureau, the US Department of Commerce and the Ministry of finance of Japan, the import volume of garments in the European Union, the United States and Japan was 8.50%, 5.91% and -0.68% respectively. The imports from China were 4.03%, 0.68% and -5.95% year-on-year respectively, lower than the average growth rate of 4.47, 5.23 and 5.27 percentage points from the global import.

Meanwhile, the share of Southeast Asian countries such as Vietnam, Bangladesh, Kampuchea and Burma in the three main markets of the European Union, the United States and Japan continued to grow, especially since the escalation of trade frictions between China and the United States since 2018, exacerbating the transfer of orders to Southeast Asian countries with more labour costs and tariff advantages. Since 2010, China's share of the European Union, the United States and Japan has continued to decline. According to the latest data on clothing imports announced by the European Union statistics bureau, the US Department of Commerce and the Ministry of finance of Japan, the proportion of garments imported from China by the European Union, the United States and Japan has decreased by 1.15, 1.46 and 3.11 percentage points in recent years. Meanwhile, the import of clothing from Vietnam and Bangladesh has increased by two figures, and the market share has increased by 1.53, 1.41 and 1.63 percentage points respectively.

(three) the growth rate of per capita clothing consumption expenditure has dropped.

In the first half of 2019, the disposable income and per capita consumption expenditure of our residents basically kept pace with economic growth, and the growth rate of per capita clothing consumption expenditure dropped significantly, which was far lower than that of personal development and enjoyment related consumption. The proportion of clothing consumption expenditure in per capita consumption expenditure also declined. According to the National Bureau of statistics, in the two quarter of 2019, the per capita clothing consumption expenditure of the whole country was 731 yuan, an increase of 3% over the same period last year, and the growth rate dropped 3.3 percentage points over the same period last year. Clothing consumption expenditure accounted for 7.08% of the per capita consumption expenditure, which was 0.32 percentage points lower than that of the same period last year. Over the same period, the per capita consumption of residential, educational, cultural and entertainment, medical and health care, and other consumer goods and services increased by 10.8%, 10.9%, 9.5% and 9.8% respectively, and the growth rates were higher than those of clothing consumption.

(four) the overall cost of enterprises remains high.

Due to the continuous growth of cost, such as employment, financing, taxation, raw materials, energy and so on, the comprehensive operation cost of enterprises has been increasing. According to the statistics of the National Bureau of statistics, in 2019 1-6, the cumulative cost of garment enterprises above designated size increased by 2.04% over the same period last year, and the growth rate was only slightly 0.11 percentage points lower than the increase in operating income. From the change of the proportion of cost to main business income, the average level of Industrial Enterprises above designated size has been decreasing year by year, while the proportion of garment industry has been increasing. The rapid rise of cost has further squeezed the profit margins of garment enterprises.

Three. Characteristics of industry development

In the first half of 2019, faced with a series of periodical and structural problems, China's garment industry actively promoted industrial transformation and development, and constructed a new prospect of industrial development in the new era, and entered a new track of high quality development.

The pace of structural adjustment quickened. In order to find the global value chain depression and adapt to the change of the order demand in the international market, China's garment industry is striding forward the strategic layout of globalization, setting up factories in Southeast Asia and other countries with the new attitude of organizers and managers, and accelerating the global capacity layout of production capacity. At the same time, from the changes of clothing export and investment in various provinces and cities, the export and investment of coastal provinces such as Guangdong, Zhejiang, Jiangsu and Shanghai declined, while the rapid growth of the central provinces showed that the speed of garment industry transfer in the Yangtze River Delta and Pearl River Delta region was faster.

Product upgrading has intensified. Enterprises and brands based on the consumer lifestyle and work style scene have increased the intensity of product R & D design, pay more attention to the comfort and adaptability of clothing, meet the requirements of consumers' self expression and self pleasure, and become an important starting point to adapt to the upgrading of consumption and stable development of industry.

Improve brand quality. As the center of industry value, manufacturing enterprises are further differentiated. SMEs are facing the pressure of being eliminated from the reduction of orders. Large and medium-sized enterprises also have a severe test of the balance between product quality and cost. Large manufacturing enterprises and even manufacturing brands, with strong advanced manufacturing advantages, are facing tremendous opportunities for integration and upgrading of manufacturing resources.

Terminal brand market influence improved. Menswear brand quality development, customized products into the industry highlights. The brand of women's clothing has increased multi brand, multi category, multi business and multi-channel layout, and the construction of comprehensive fashion industry group has been intensified. Leisure wear brand product fashion and high performance price ratio continue to improve, the line offline synchronization development trend is obvious. Children's wear has increased product line development, market capacity continues to expand, and market ecosystem is increasingly optimized.

Intelligent manufacturing continues to advance. Since the beginning of this year, enterprises have increased the application of intelligent production lines, intelligent logistics and other related infrastructure facilities, as well as the application of intelligent IOT solutions in production, storage and marketing systems, thus accumulating new energy for industrial development.

Four. Trend prediction

In the latest world economic outlook released in July this year, the International Monetary Fund once again lowered its forecast for world economic growth in 2019 and 2020 to 3.2% and 3.5%, down 0.1 percentage points compared with April April, and reduced the global trade in goods and services in 2019 to 0.9 percentage points to 2.5%. Meanwhile, the world bank and WTO predict that global economic growth will slow down to 2.6% in 2019. Trade and domestic sales will drag down the growth of developed economies, while the growth of emerging economies and developing economies will be constrained by investment weakness.

Looking forward to the 2019, the global economy and international trade are showing a trend of slower growth. There are still many uncertain unstable factors such as the European Union, the European refugee crisis and the increasing tension in international trade. China's main export market demand growth momentum is insufficient, consumer confidence index continues to decline, coupled with China's exports of goods from the United States in September 1st to add 10% of the 300 billion tariff list includes all clothing products, will directly affect the second half of the clothing export. At the same time, the uncertainty of Sino US trade friction will further aggravate the speed of international buyers' great adjustment to purchasing strategy and supply chain layout. Garment export will face double pressure of market demand weakening and order transfer. The international market will be under pressure for a long time, and it will be difficult to improve in the short term.

From the domestic market, in the first half of this year, China's national economy maintained a steady growth of 6.3%, and the economic operation was in a reasonable range. The per capita disposable income of the residents increased by 0.6 percentage points faster than the per capita gross domestic product (GDP) growth rate. The consumer confidence index continued to grow at a high level, and the structural reform of the supply side was pushed forward to provide a strong support for the continuous improvement of the domestic demand market. At the same time, in the second half of the year, a series of policies on "steady employment and promotion fees" will be implemented step by step, and tax reduction and tariff reduction measures will enter the dividend release period, which will help stimulate consumption and enhance the vitality of the domestic market. Thanks to the stable macroeconomic environment and the consumption base, the domestic garment market will maintain steady development and the growth rate will slow down.

In the face of complex and severe external development environment, China's garment industry will continue to push forward the structural reform of supply side in an effort to push forward the effective implementation of the "three products" strategy, make comprehensive, pragmatic and innovative development, and strive to enhance the endogenous driving force and risk resisting ability of enterprises, and promote the overall smooth and benign operation of the industry.