Market Analysis: Textile Industry Boom In The Fourth Quarter Of 2021

In January 2022, China Textile Industry Federation carried out a survey on the status quo of textile enterprise management. After collating and analyzing the effective data, the prosperity index of textile enterprises in the fourth quarter of 2021 is higher than that in the third quarter, and the industry is very cautious about the forecast of the first quarter of 2022.

Overall prosperity is on the rise

It is estimated that the prosperity index of China's textile industry in the fourth quarter of 2021 is 62.3, an increase of 3.6 points compared with the third quarter. The main reasons are that the domestic epidemic situation is well controlled, the National Day holiday, "double eleven" e-commerce promotion, and the promotion of new year commodities have driven the consumer market to continue to recover, and textile industry enterprises show strong resilience and vitality, China's textile industry recovered steadily in the fourth quarter. This is also consistent with the development trend of the National Bureau of statistics on the purchasing manager index of the manufacturing industry. The PMI of the manufacturing industry dropped out of the expansion range in September and October in a row, and returned to the expansion range in November and December. The index was 50.3% in December.

In the fourth quarter of 2021, the profitability of China's textile industry has increased compared with the third quarter. According to the survey, 46.6% of textile enterprises said that the profit of the fourth quarter was higher than that of the third quarter, which was 7.7% higher than that of the third quarter; 22.1% of textile enterprises said that their profits were lower than that of the third quarter, which was 7.1% lower than the survey results in the third quarter.

Increase of production activity

According to the calculation, the production index of the textile industry in the fourth quarter of 2021 is 69.1, which is 6.9 points higher than that of the third quarter, and the overall active production has improved.

Affected by last year's textile industry's value-added before and after the high base, the industry's value-added growth this year showed a trend of high before and low after. According to the data of the National Bureau of statistics, from January to December 2021, the industrial added value of China's textile industry increased by 4.4% year-on-year, 1.9 percentage points lower than the growth rate from January to September. But on the whole, the output of China's main textile products has maintained a different range of growth. According to the data of the National Bureau of statistics, in 2021, chemical fiber will increase by 9.1%, yarn by 8.4%, cloth by 7.5% and clothing by 8.4%.

Consumption growth accelerated

It is estimated that the new order index of China's textile industry in the fourth quarter of 2021 is 66.8, 5.3 points faster than that of the third quarter, and the market demand is in the growth range. The main reason is that China's economy has recovered steadily and the consumer market has continued to recover; The recovery of international market demand has led to the growth trend of new orders.

Domestic online and offline consumer market sales are good, internal circulation is smooth. According to the data of the National Bureau of statistics, in 2021, the retail sales of clothing, shoes, hats, needles and textiles in China will reach 1384.2 billion yuan, a year-on-year increase of 12.7%, and that of online wearing goods will increase by 8.3%.

Orders in the international market increased slightly and exports set a record. It is estimated that in the fourth quarter of 2021, the international order index of China's textile industry will be 52.5, and new orders will slightly increase compared with the third quarter. According to the data of China Customs, in 2021, China's textile and clothing exports reached 315.47 billion US dollars, an increase of 8.4% year-on-year. Among them, the textile export was 145.2 billion US dollars, a year-on-year decrease of 5.6%; Clothing exports reached 170.26 billion US dollars, up 24.0% year on year; Exports reached a record high in the same period.

The price of raw materials falls down

It is estimated that the purchasing price index of raw materials of China's textile industry in the fourth quarter of 2021 is 77.4, which is 3.2 percentage points lower than that of the previous period. After the price of raw materials continued to run at a high level, the conduction to the textile downstream was hindered. In the fourth quarter, the price of lack of back support began to fall.

According to the market tracking data, driven by the demand, the price of raw material market will continue to rise in 2021, especially in early October. However, by the end of October, affected by a series of national regulatory measures and the tightening and easing policy of the Federal Reserve, the price of textile raw materials began to turn downward. In December, the average price of domestic cotton remained at 21970 yuan / ton, a slight increase of 2.4% compared with that in October; Polyester staple fiber price to 6908 yuan / ton, down 13.3% from October; However, the price of viscose staple fiber fell to 12626 yuan / ton, down 10.2% from October. Overall, the price of textile raw materials declined in November and December.

According to the survey, most enterprises purchase raw materials at any time or only 30 days in advance. In order to avoid the impact of purchase price fluctuation, enterprises seldom purchase raw materials more than 90 days in advance. In the survey, less than 20% of enterprises purchase raw materials more than 90 days in advance.

Industry investment remains stable

In the fourth quarter of 2021, China's textile industry as a whole maintains a relatively stable investment rhythm. According to the survey, 46.9% of enterprises said that their investment remained stable this year; 35.0% of enterprises said that their investment increased this year, 2.1 percentage points higher than the survey data of the previous period. According to the data of the National Bureau of statistics, in 2021, the fixed asset investment in China's textile industry, textile clothing industry and chemical fiber industry will increase by 11.9%, 4.1% and 31.8% respectively year-on-year. Although on the whole, the growth rate of fixed asset investment in textile industry has slowed down this year, but the growth rate of fixed asset investment in chemical fiber industry has exceeded the average growth rate of manufacturing industry since July, and the annual growth rate has been 18.3 percentage points higher than that of manufacturing industry; The growth rate of textile industry is also approaching the average investment growth level of manufacturing industry.

In the survey of new fixed assets investment projects, although enterprises invest more in upgrading the original production capacity in 2021, 58.1% of the enterprises upgrade and transform on the basis of the original production capacity, which is the main new fixed assets investment project of the current enterprises; However, 28.8% of the sample enterprises have built new capacity. According to the feedback of enterprises, the main factors affecting the investment of enterprises are the market prospect of the industry and the benefits of enterprises. 72.2% of the enterprises said that the market prospect was an important factor affecting their investment, and 65.3% of the enterprises said that the enterprise benefit was an important factor affecting their investment.

Be cautious about future development

Based on the current situation of production and operation and the feeling of the market, this paper makes a prospect for the industry in the first quarter of 2022. On the whole, enterprises are more cautious in judging the future industry prosperity. According to the calculation, the prosperity index of textile industry in the first quarter of 2022 is expected to be 51.2, which is 11.1 points lower than that of the fourth quarter of 2021. Enterprises believe that the overall operation speed of the first quarter of 2022 will be slower than that of the fourth quarter. Specifically, production is expected to slow down in the first quarter of 2022; New orders may decrease slightly; The price of raw materials may continue to fall at a high level. Industrial Economy Research Institute of China Textile Industry Federation