China Textile Association Released The Fourth Survey Report: The Average Worldwide Orders Fell By 42%.

During the period from May 20, 2020 to June 8th, the International Textile Federation conducted Fourth International Textile Federation's new crown impact survey on the International Federation of Textile Federation members, associated enterprises and associations to understand the impact of the new crown epidemic on the global textile value chain. About 600 companies from around the world took part in the survey.

Globally, orders continue to decline by an average of over 40% (Figure 1). The order cancellation and postponement ratio is between 30% (Southeast Asia) and 55% (South America).

Chart 1: orders are down by 42% globally.

　　 Impact of new crown pandemic on orders (by Region)

From the different sectors of the textile value chain, orders from all the departments from spinning mills to garment manufacturers have been significantly reduced (Figure 2).

Chart 2: orders for all production sectors in the global textile value chain are reduced by 37% and 46%.

　　 Impact of new crown pandemic on orders (by production department)

Compared with 2019, the turnover is expected to remain unchanged in 2020 from the Third International Textile Federation's new crown epidemic survey. Overall, the turnover of global enterprises is expected to decline by an average of 32% on average in 2020. The projected turnover in different regions decreased by 22% (Southeast Asia) to 36% (East Asia) (Figure 3).

Chart 3: on a global scale, the turnover in 2020 is expected to decline by an average of 32% (compared with 2019).

　　 Impact of the new crown pandemic on 2020 turnover (by region, compared with 2019)

With regard to the expected turnover in 2020, the performance of integrated integrated manufacturers seems to be slightly better, with a turnover expected to decline by 26%, while other sectors expect a decrease of 31% and 34% in 2020 (Figure 4).

Figure 4:2020 the global textile value chain's turnover declined by 26% and 34%.

　　 Impact of the new crown pandemic on turnover in 2020 (according to the production sector, compared with 2019)

When asked when the turnover would return to pre crisis levels, most participants (23%) expected this in the first quarter of 2021, followed by 21% participants expecting the second quarter of 2021 and 14% expected to be in the third quarter of 2021. Nevertheless, 20% of enterprises expect a faster recovery in the fourth quarter of 2020 (Figure 5).

Enterprises in different regions and departments have little difference in anticipation of the recovery rate. Most enterprises are expected to return to pre crisis levels in the first quarter or second quarter of 2021.

Figure 5:44% is expected to reach the pre crisis level in the first quarter or second quarter of 2021.

　　 When can turnover be restored to pre crisis levels?

The survey also shows that since the beginning of the crisis, most enterprises in the textile value chain have to cancel / postpone orders themselves. In the spinning industry, 50% of the enterprises cancelled / delayed orders, while in weaving / knitting industry, the figure even reached 83% (Figure 6).

Figure 6: percentage of companies who have to cancel / postpone orders due to cancellation / postponement of orders.

　　 Since your order has been cancelled or delayed, has your company also had to cancel customer orders?

On this basis, the survey also asked how the order was cancelled / postponed. According to the industry segmentation, 26% to 40% of enterprises were not informed of cancellation / extension in a collaborative manner. It is worth noting that the impact of integrated integrated producers (26%) is significantly smaller than that of other sectors (Fig. 7).

Figure 7: which customers are notifying sellers / producers of cancellation / delay without warning / discussion?

　　 There is no warning / discussion of the percentage of customers being cancelled by the customer (according to the production department).

Speaking of regional differences, 43% of North American enterprises did not receive the warning of cancellation / extension, while the proportion in South America and Southeast Asia was only 20% and 21% respectively (see below).

　　 There is no warning / discussion of the proportion of customers being cancelled orders (by Region).

When asked what lessons learned from the crisis (Figure 8), the most important lesson was "reducing dependence on a few customers" (25%), followed by "strengthening the balance sheet" (21%) and "increasing the type of products available" (17%), "changing the products offered" (11%) and "reducing dependence on a small number of suppliers" (9%).

Figure 8: reducing dependence on a few customers is the most important lesson learned by the crisis.

　　 What lessons can we learn from the crisis?

In addition to the above lessons, the participants also referred to other lessons, such as:

A higher degree of flexibility to meet different needs.

To cooperate with reliable and sustainable partners.

Develop more innovative products.

Improving risk management.

Finally, participants pointed out that the industry was expected to merge after the industry was found to be overcapacity as demand was significantly lower than the crisis. Owning good balance sheets, innovative products, diversified and flexible operations, and enterprises with different customers in different regional markets are likely to be more powerful in this crisis.