Industrial Economy Research: Guide To The Macro Economic Environment Of Textile Industry

Since 2021, the global economy has gradually recovered under the background of dislocation of epidemic cycle and supply-demand dislocation in various countries, showing the fluctuation characteristics of "weak start in the first quarter, strong recovery in the second quarter, and a sharp drop in the third quarter". In the fourth quarter, the risk of economic "stagflation" has increased, and the weak situation of demand side is still obvious. In November, J. P. Morgan Global Manufacturing Purchasing Managers Index (PMI) was 54.2, continuing the shock downward trend since March. The new order index and output index were 53.3 and 52.6, respectively, 4 and 3 percentage points lower than the high in May. In November, the OECD leading index was 100.7, but the consumer confidence index was only 99.3, which has been in the contraction range since August. Affected by the interruption of production and supply in key industries such as automobiles and semiconductors, 4 The global commodity trade slowed down significantly in the quarter, and the trade in goods barometer index of WTO significantly decreased by 10.9 percentage points to 99.5 from the high level of 110.4 in the third quarter, which was lower than the trend level. Commodity prices are still in the rising range. In November, the IMF global commodity price index reached 183.8, up 58.4 points from the end of 2020, reaching the highest level since 2013.

Figure 1: global supply and demand side of the main macro indicators change trend

Source: IHS Markit, WTO, OECD

China's macro-economy has maintained a recovery trend, but the downward pressure has increased under the influence of domestic and foreign demand slowdown, rising production costs and local epidemic situation. According to the data of the National Bureau of statistics and the customs, the total retail sales of consumer goods in China from January to November Total exports and fixed assets investment (excluding farmers) increased by 13.7%, 31.1% and 5.2% year-on-year, respectively, and the growth rate slowed down by 2.7%, 1.9 and 2.1 percentage points compared with the previous three quarters. In the field of consumption, online consumption maintained a rapid growth, and "simple packaging" of "double 11" Shopping Festival was held The trend of green and low-carbon consumption is gradually emerging, and the growth rate of consumption of basic life and some upgraded goods in commodity retail has accelerated; In the field of investment, the growth rate of private fixed assets investment is higher, the growth trend of manufacturing investment is better, and the proportion of technological transformation investment in manufacturing industry investment has increased. From January to October, the industrial added value and total profit of Enterprises above designated size increased by 10.9% and 42.2% respectively on a year-on-year basis, and the growth rate slowed down by 0.9% and 2.5% compared with the previous three quarters. Under the support of national policies and measures such as strengthening energy supply guarantee and stabilizing market prices, manufacturing production and operation activities returned to the expansion range. In November, the purchasing manager index (PMI) of the manufacturing industry was 50.1, up 0.9 percentage points from October.

Figure 2: cumulative year-on-year growth rate of China's "troika" index

Source: National Bureau of statistics, China Customs

The textile industry recovered steadily. Except for investment, the scale of other major economic indicators increased compared with that before the epidemic. Domestic sales recovered steadily under the support of favorable factors such as "double 11" promotion moving forward, and the export scale reached a record high in the same period. However, the trend of "high before and low after" will not be reversed in the whole year. Problems such as poor transmission of product prices to terminals and rising comprehensive manufacturing costs are difficult to solve in the short term. The impact of orderly power consumption normalization on industry supply still exists. Recently, affected by the new coronavirus mutation again, the arrival of the off-season sales and other factors, the market began to weaken, the prices of cotton, polyester, yarn, grey cloth all declined, and the inventory of finished products increased. Before the end of the year, textile enterprises to reduce prices to inventory, return funds become the mainstream trend, further aggravating the downward trend of prices. Enterprises are generally cautious about future market expectations, and the weak market situation may continue until the spring sales season of 2022.

(Niu Shuangxin, Zhang Qian, China Textile Industry Economic Research Institute)