Report On The Impact Of The Third Global New Crown On The International Textile Industry

The number of orders cancelled and postponed worldwide has risen from 8% to 41% since the first investigation of the impact of the first New International Textile Federation in March. The third survey confirmed the expectations of the first and second surveys, that is, the crisis is global and has deteriorated over the past four weeks. Enterprises in all regions reported the cancellation and postponement of a large number of orders. Only a small number of enterprises adapt to changes in the situation through the production of personal protective equipment (PPE).

It is worth noting that the order reduction in East Asia is 28%, significantly lower than that in all other regions (41% and above). It can be assumed that this area was first affected by the new crown epidemic, and first recovered from the crisis. In particular, China and South Korea successfully controlled the epidemic. In the past few weeks, most Chinese textile companies have substantially increased their production. At the same time, offline retail outlets have been reopened, and consumption in East Asian countries has gradually resumed. But how the consumption situation will change remains to be seen.

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Compared with 2019, global enterprises expect an average turnover of 33% in 2020. Compared with the second survey, enterprises are more pessimistic about the prospects. European enterprises The turnover in 2020 is expected to drop by only 22%, which is much better than the 33% in the second survey. East Asia Businesses expect a 26% decrease in turnover, which is close to the second survey report data (24%). On the other hand, Southeast Asian and South Asian enterprises Expectations for turnover are clearly deteriorating. The impact of the epidemic is relatively late, so the impact of the epidemic is also delayed. Compared with 2019, the turnover in Southeast Asia and South Asia is expected to decline to 38% and 31% respectively in 2020. Africa, South America and North America The turnover is not expected to change significantly.

At present, the biggest challenge and difficulty facing the global textile industry is how long the epidemic situation will last and when trade flows will return to normal.

Among them, To ensure adequate trade liquidity is the concern of most enterprises. On the one hand, because many customers cancel and postpone orders, manufacturers can not get cash flow. On the other hand, the reintegration of enterprises in different countries will affect the normal operation of the global supply chain.

In the medium to long term, uncertainty in the future is a big problem. Many companies want to know what the post epidemic era will look like. What will recovery be like? Will consumer spending recover as quickly as before? Will consumer behavior change because of this crisis? Due to the inability to predict how long the crisis will last, uncertainty in the future has brought heavy pressure to the enterprise. Many orders have been cancelled or delayed, and new orders are few. Will there be a second wave of COVID19 infection this autumn and winter, leading to the second blockade?

At the same time, because of the increase of uncertainty, it is very difficult for enterprises to plan for production, retaining jobs and retaining talents are becoming more and more difficult. They are afraid that when demand recovery is not ready, they can not retain those loyal customers. The current lack of sales is further leading to overstock in many enterprises, which may bring negative pressure on future pricing.

According to the survey, At present, many enterprises are considering diversified operation, focusing on medical textiles. In fact, the huge demand for personal protective equipment (PPE) has provided a new market for some enterprises.

In addition, due to dependence on foreign raw material supply and market demand, enterprises in some countries are considering concentrating production, streamlining their organization and production processes, reconsidering the dependence on global supply chains, and promoting enterprises to recognize the importance of local / regional supply chains, which will change the current pattern of textile supply chain.

In order to fight against the epidemic, many countries in the world have provided support policies for their enterprises, such as deferring taxes, postponing payment of social security payments, obtaining low interest loans and deferring repayment. In some countries where electricity is supplied by the government, enterprises can delay the payment of electricity charges.

In Europe, a very important tool for the government to support enterprises is short term work plan. The basic principle is that enterprises lacking demand can reduce working hours, and a certain percentage of employees' salaries can be paid by unemployment insurance. In this way, enterprises can retain employees and pay only the reduced hours of work. At the same time, compared with the original income, the income level of employees has not declined significantly (due to unemployment insurance as a supplement).

With the gradual control of the international epidemic situation, many enterprises hope to learn from China's experience of resumption of work, expect to return to work in May 11th or the end of May, and retailers and brands will unilaterally cancel the order, and this will boost the structural adjustment of international textile suppliers, win win cooperation and overcome difficulties.