Analysis Of Filament Weaving Industry Data

In 2022, the economy of the filament weaving industry started smoothly in the first two months. However, after March, the prices of bulk commodities fluctuated sharply and the domestic epidemic situation rebounded at multiple points due to the repeated epidemic situation in the new round and the situation upgrading in Russia and Ukraine. The industry as a whole was affected by complex factors such as shrinking orders, poor logistics, rising prices of raw and auxiliary materials, and some operating indicators fluctuated, Economic operation is under pressure gradually.

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　　 1、 In the first quarter, the quality effect of the operation has not returned to the level before the epidemic

According to the statistics of the National Bureau of statistics, in the first quarter, China's chemical fiber weaving and printing and dyeing finishing industry revenue increased by 18% year on year; The total profit increased by 65% year on year; The profit margin was 2.4%, 0.7 percentage points higher than that in the first quarter of last year. In terms of industry segmentation, the business income of chemical fiber weaving industry (above the designated scale) increased by 17% year on year; The total profit increased by 43% year on year; The profit margin was 2.4%, 0.4 percentage points higher than that in the first quarter of last year. The business income of chemical fiber dyeing and finishing industry (above designated) increased by 23% year on year; The total profit increased by 313% year on year; The profit margin was 2.5%, 1.8 percentage points higher than the first quarter of last year.

From the above data, it can be seen that the operation quality and efficiency of filament weaving industry in the first quarter has improved to a certain extent compared with that of last year. However, according to the industry enterprises, the actual production and operation quality is weaker than the current data performance, and the enterprises are under obvious pressure. According to the data provided by the National Bureau of statistics, although the total profit of China's chemical fiber weaving industry (above scale) increased by 43% in the first quarter of 2022, compared with the same period in 2019, the total profit decreased by 18% and the profit margin decreased by 0.6%. In the first quarter of 2022, the loss amount of loss making enterprises in chemical fiber weaving industry (above scale) increased by 49% compared with that in 2019, and the debt amount increased by 31%; The three expenses of enterprises increased by 11%, including 8% increase in sales expenses, 17% increase in administrative expenses and 4% increase in financial expenses; Accounts receivable increased by 9%, and finished goods inventory increased by 48%.

To sum up, the economic benefits of China's filament weaving industry are still in the recovery and development after the severe impact of the outbreak, and the main economic indicators are continuing to recover, but have not yet recovered to the level of the same period before the epidemic. Especially since March this year, the epidemic situation has spread in many places in China. Under the static management measures of the epidemic situation, the raw material procurement, finished product delivery and normal production of enterprises have been affected to a certain extent, and the filament weaving industry is operating under pressure.

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　　 2、 There is no obvious effect on the export quality

From January to April 2022, the export of China's chemical fiber filament weaving industry keeps increasing, showing a good anti risk ability. According to the data of China Customs, from January to April, the cumulative export value of China's chemical fiber filament fabrics reached 6.6 billion US dollars, a year-on-year increase of 35%, and an increase of 44% compared with the same period in 2019; The total export volume was 6.9 billion meters, with a year-on-year increase of 20%, and an increase of 36% compared with the same period in 2019. The average price was $0.96/m, up 13% year-on-year and 6% higher than the same period in 2019.

With the gradual recovery of overseas textile supply chain and the gradual cancellation of epidemic prevention and control measures in major overseas consumption areas such as Europe and the United States, the terminal consumption demand has continued to warm up. Thanks to the unique advantages of China's filament weaving industry, the export of filament fabrics has increased against the trend. It is worth noting that the domestic sales ratio of China's filament weaving industry enterprises is large, most of the products are indirect exports, and the pulling effect of export on the operation quality and efficiency of industry enterprises is not prominent.

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　　 3、 The proportion of enterprises to reduce production increased

In order to accurately grasp the overall production and operation of the industry, China filament weaving Association launched an online questionnaire survey. The enterprises surveyed mainly concentrated in Jiangsu, Zhejiang, Fujian, Shandong and other places, basically covering the main gathering areas of China's filament weaving industry.

From the perspective of the current capacity utilization rate of enterprises, 22% of the surveyed enterprises are producing at full capacity, which is 23% lower than the previous survey (March 2022). The capacity utilization rate of 32% of the surveyed enterprises remains above 80%, that of 40% of the enterprises is between 50% and 80%, and that of individual enterprises is less than 50%. The current capacity utilization rate of 62% of the surveyed enterprises is lower than that of the same period last year. Among them, 28% of the enterprises said that the capacity utilization rate decreased by more than 20% compared with the same period last year, as shown in Figure 1. From the survey results, the capacity utilization rate of industrial enterprises is obviously insufficient.

When investigating the causes of insufficient operation, 49% of non full opening enterprises said that due to insufficient orders and active production restriction, the production cost was too high, the logistics was not smooth, and the epidemic prevention and control accounted for 17% of the total.

Specifically, 74% of the surveyed enterprises have stopped production due to the epidemic situation, and even 18% of the enterprises have stopped work for more than one month, distributed in Suzhou City, Jiangsu Province, Jiaxing City and Shaoxing City of Zhejiang Province.

For the current enterprise order satisfaction rate (the ratio of the customer's predetermined demand to the actual supply), only 6% of the enterprises said that the current order satisfaction rate was more than 100%, 36% of the enterprises' order satisfaction rate was more than 70%, and 24% of the enterprises' order satisfaction rate was less than 50%.

From the current inventory situation of enterprises, the proportion of enterprises with inventory less than 1 month accounted for 20%, 62% of enterprises said that the current inventory was 1-3 months, 14% of enterprises were at the high inventory level of more than 3 months, and 4% of enterprises had inventory for more than 5 months, and their production products covered imitation silk fabrics and functional fabrics.

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　　 4、 Obvious pressure on the industry

At present, 80% of enterprises reflect that the biggest difficulties in the process of production and operation are the decline of market demand and the shortage of orders; About 70% of the enterprises are faced with the problems of rising production costs, declining profits, blocked transportation and logistics, or high prices; In addition, more than half of the surveyed enterprises reported the existence of raw material price fluctuations; Nearly 30% of enterprises are also faced with the situation of increasing inventory, incomplete resumption of industrial chain, shortage of raw materials or lack of follow-up processing procedures. In addition, the transfer of orders to other countries and difficulties in overseas market expansion have also troubled many enterprises, and enterprises are under obvious pressure.

60% of the respondents did not think that the overall price of the main business was high, and the overall price was low; 18% of enterprises think the price is normal now; 22% of the enterprises said that the price of the main products was slightly surplus.

Only 26% of the surveyed enterprises think that the business situation is good, 44% of the enterprises think that the business situation is general, and 28% of the enterprises think that the business situation is poor, as shown in Figure 8.

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　　 5、 Research and judgment of enterprises on the first half of 2022

Combined with the actual production from January to April in 2022 and the current production and operation status of enterprises, the interviewed enterprises made a forecast on the sales revenue and operating costs in the first half of 2022. From the perspective of enterprises' prediction of sales revenue, 70% of the surveyed enterprises believe that the sales revenue will decline in different degrees in the first half of 2022, 20% of the surveyed enterprises think that the sales revenue will be the same as that of the same period last year, and 10% of the surveyed enterprises think that the sales revenue will increase slightly. The above data show that entrepreneurs' confidence has declined slightly compared with March this year.

From the perspective of operating cost forecast, 24% of the surveyed enterprises believe that the operating cost will decline slightly in the first half of 2022, 38% of the surveyed enterprises think that the operating cost is basically the same as that of the same period last year, while the remaining 38% think that the operating cost will increase in varying degrees.

The increase of raw material price, labor cost and logistics freight are the primary factors leading to the increase of business cost, and the concentration ratio is more than 60%; More than half of the enterprises reported that the loss caused by the failure to deliver goods on time due to shutdown or logistics obstruction, and the price rise of production factors such as water, electricity and natural gas are also important factors causing the increase of operating costs. Enterprises are also facing the pressure of increasing the three fees, driving up the operating costs.

In order to further determine the impact of raw material price fluctuation on enterprises, the survey shows that 98% of the surveyed enterprises are faced with the situation of rising costs and sharp reduction of profits due to the fluctuation of raw material prices. Nearly half of the enterprises are cautious in receiving orders. Other performances include active production restriction, greater pressure on liquidity turnover and forced cancellation of original orders.

Through refining the labor cost of enterprises, we can see that 74% of the surveyed enterprises have increased per capita wages, 64% of the surveyed enterprises have increased the labor cost per unit product, and 26% of the surveyed enterprises have idled due to insufficient operation, which ultimately affects the labor cost.

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　　 6、 Summary and suggestions

Since the first quarter of 2022, the filament weaving industry has been faced with many difficulties, such as poor logistics, insufficient orders, rising raw material prices, rising electricity charges, and increasing labor costs. As a result, the pressure on production costs of enterprises is intensified, the profit space is compressed significantly, and the cash flow of some small and micro enterprises tends to be tense. In fact, it is helpless for enterprises in Jiangsu and Zhejiang provinces to take the initiative to reduce production to cope with the current difficulties. It is expected that in the first half of the year, enterprises will still face multiple challenges, such as poor logistics of raw materials and auxiliary materials, rising costs and hindered market under the epidemic situation, and entrepreneurs generally reduce their development expectations.

In the second half of the year, the complex situation at home and abroad increased the pressure on the textile industry. Filament weaving enterprises should pay attention to the weak market demand and the pressure of rising raw materials, transportation and labor costs which are difficult to resolve. At present, the government has issued a package of relief and assistance policies, which will provide support for the development of the textile and clothing industry in the next stage. From the medium and long-term perspective, the industry is expected to return to steady growth and wait for the opportunity of demand recovery.

2022 will be a rare "cooling off period" for the fast developing filament weaving industry. Facing the stage dilemma of "high cost and weak demand", enterprises must actively adjust the development direction, make good use of relevant policies and measures, pay more attention to scientific and technological innovation, product development and quality improvement, continuously promote the transformation and upgrading of products, equipment and technology, strengthen the fine management of enterprises, actively tap new demands, develop new products and expand new applications, Take the initiative to make full use of the advantages of the domestic and foreign markets to achieve healthy development.

(source: filament weaving)