Analysis On The Operation Of China'S Industrial Textiles Industry In The First Half Of 2021

In 2020, driven by the demand for epidemic prevention materials, China's industrial textiles industry has experienced a round of rapid growth, which has accumulated a large base for the development of the industry in 2021; At the same time, with the change of the global epidemic situation, the demand for epidemic prevention materials has been greatly reduced. The income and profit growth rate of mask, protective clothing and related raw and auxiliary materials industry will be significantly reduced in 2021, which will drive the growth rate of major economic indicators of the whole industry down.

　　 1、 Industry overall demand and production decline

According to the survey conducted by the association on member enterprises, 40% of the enterprises said that the domestic and international market demand index decreased to varying degrees. In the first half of the year, the domestic and international market demand indexes were only 49.0 and 43.4, both in the contraction range. Among them, the domestic and international market demand index of the medical and health industry was only 31.4 and 34.8, which was at the lowest level in the industry. For example, the demand index of thread belt and interlining cloth reached 69.9 and 60.0 respectively, and the demand index of transport textiles reached 57.1.

Due to the decline in demand, the operating rate of enterprises has generally declined. According to the survey, 27.5% of the enterprises said that they could produce at full capacity, 36% said the capacity utilization rate was about 80%, 18.8% was about 60%, and 17.6% was less than 40%.

　　 2、 The operation of the industry has been greatly adjusted

According to the data of the National Bureau of statistics, from January to may 2021, the industrial added value of Enterprises above Designated Size in China's industrial textiles industry decreased by 11.9% year-on-year. However, if the epidemic factors are removed, the industrial added value of the industry will still increase by 15.2% in two years. The operating revenue of Enterprises above the industrial scale reached 117.51 billion yuan, up 0.3% year-on-year. The total profit was 7.02 billion yuan, down 54.5% year-on-year. The profit margin was 6.0%, and the year-on-year decrease was 7.2%. Although the growth rate of business income and total profit of the industry has been greatly reduced, the profit level is still in a relatively ideal state compared with the same period in history, and it is only lower than that of chemical fiber and textile machinery in the current textile industry.

Enterprises have a more rational understanding of the current adjustment. According to the survey conducted by the association, nearly 16% of enterprises said that their profits dropped by more than 50%; A further survey of 65 enterprises whose profits have dropped by more than 20% shows that 40% of the enterprises think that this is a normal adjustment for the rapid growth of the industry in 2020, and it will take 1-2 years to get out of the adjustment period.

From January to may, the operating income and total profit of Nonwovens Enterprises above designated size decreased by 7.7% and 67.8% respectively year-on-year, and the profit margin was 6.2%, with a year-on-year decrease of 11.5 percentage points; The operating income and total profit of the enterprises above the scale of rope, cable and cable increased by 24.6% and 43.6% respectively year-on-year, and the profit margin was 4.2%, with a year-on-year increase of 0.6 percentage points; The operating income and total profit of textile belt and cord fabric Enterprises above designated size increased by 28.2% and 198.0% respectively year-on-year, and the profit margin was 5.7%, with a year-on-year increase of 3.3 percentage points; The operating income and total profit of Enterprises above awning and canvas scale increased by 37.4% and 63.3% respectively year-on-year, and the profit margin was 6.2%, with a year-on-year increase of 1.0 percentage points; The operating income and total profit of Enterprises above the designated scale of textile for medical and health, filtration and geotechnical textiles decreased by 10.3% and 53.5% respectively on a year-on-year basis. The profit margin was 6.0%, with a year-on-year decrease of 5.6 percentage points.

In terms of cost, the surveyed enterprises generally reflected that the price of raw materials changed greatly in the first half of the year. The price index of raw materials in the industry was 77.1, which was in a fast rising range. The accounts receivable of enterprises also increased by a large margin. From January to may, the accounts receivable of Enterprises above the industrial scale increased by 21.8%, far higher than the growth of income. The labor cost of enterprises continued to grow, but the growth rate was moderate. Two thirds of the enterprises said that the labor cost increased in the first half of the year, and 27% of the enterprises said the increase was more than 10%.

　　 3、 Cautious investment and focus on tapping existing capacity

Among the surveyed enterprises, nearly 40% of the enterprises have projects under construction, 8% of them have cancelled or postponed the planned investment projects, and the rest have no investment projects. Among the investment projects under construction, 64% involve upgrading of existing equipment, 44% involve plant construction, and 17% involve environmental protection transformation. Despite the high-speed expansion in 2020, 16.7% of the enterprises still said that their production capacity was insufficient. These enterprises mainly concentrated in the fields of filtration, safety protection, tape, industrial felt and nonwovens. The investment heat in different fields reflects the great difference of the market structure within the industrial textiles industry, which reflects the strong anti risk ability of the industry.

　　 4、 The export of epidemic prevention materials dropped sharply

According to the customs data, from January to may, China's chemical fiber nonwovens protective clothing (including medical protective clothing) exports reached 1.43 billion US dollars, a year-on-year decrease of 34.5%; The export of unlisted textile products (including masks) was 6.01 billion US dollars, down 75.1% year on year.

The export of non epidemic prevention materials shows a strong recovery momentum. The value of nonwovens, special yarns, thread, rope, cable, cable and their products (Chapter 56 products of comprehensive classification of Customs commodities) was 3.52 billion US dollars, with a year-on-year increase of 46.4%. Among them, the export volume of nonwovens was $2.04 billion, with a year-on-year increase of 54.9%, and the export volume was 627000 tons, with a year-on-year increase of 52.2%; The export volume of industrial textiles (Chapter 59 products of comprehensive classification of Customs commodities) was 3.5 billion US dollars, up 38.0% year on year.

　　 5、 Difficulties and challenges faced by the industry

As for the main problems faced by the industry, 50.4% of the enterprises think that the market demand is declining and the orders are insufficient. These enterprises mainly come from the enterprises in the epidemic prevention material industry chain; The second major problem faced by enterprises is that due to the basic stagnation of global travel for epidemic prevention and control, enterprises can not participate in foreign exhibitions and visit international customers, and they face resistance in developing international markets; 37.8% of the enterprises said that it was difficult to recruit qualified workers because of the difficulties in employment, and the turnover rate of front-line workers was high; In addition, the rapid growth of international freight also brings great trouble to the export of enterprises.

In terms of external challenges faced by enterprises, the rapid rise of raw material prices is a common problem reflected by enterprises; 52.4% of the enterprises think that the rapid expansion of production capacity leads to excessive competition in the industry and the downward pressure of product prices is great. Enterprises are generally optimistic about the competition from low-cost countries. They have strong confidence in their own innovation ability, product quality and customer relationship, and are confident to participate in global competition.

　　 6、 Annual forecast

According to the survey of the association, the annual order index of the interviewed enterprises is basically consistent with that of the first half of the year and is in the contraction range. The income index and profit index have slightly increased compared with the first half of the year, but they are still hovering near the prosperity and withering line. The impact of the sharp drop in demand for epidemic prevention materials on the industry will be further revealed in the second half of the year. It is expected that the growth rate of the industry's operating income will decline, the decline rate of profits will be expanded, and the profit level of the industry will return to normal, but it will continue to maintain the leading level in the textile industry, and the operating income and profit will be higher than the level before the epidemic.

(source: China Industrial Textiles Association)

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