Attention: Data Analysis Of Economic Operation Of China'S Garment Industry From January To May 2022

In May, with the overall improvement of domestic epidemic prevention and control, the steady progress of enterprises' resumption of work and production, the smooth recovery of industrial chain supply chain, and the implementation of policies and measures such as stable growth and promotion of consumption, the periodic impact of domestic epidemic on China's clothing industry is gradually alleviating, the industrial added value of the industry is recovering positive growth, the domestic sales have improved, and the export has stabilized and rebounded. However, in the market situation of weak demand, high cost and high inventory, the growth rate of clothing production slows down, the enterprise benefit is under serious pressure, and the total profit turns to negative growth for the first time since 2021. In the face of a more severe and complex internal and external development situation, the clothing industry needs to actively deal with many risks and challenges, such as weakening global economy, increasing geopolitical risks, intensifying trade frictions and rebounding epidemic situation. It is necessary to grasp the development window period and strategic opportunity period, continuously deepen the transformation and upgrading, adhere to innovation driven collaborative development, and constantly enhance the security, controllability and competitiveness of the industrial chain supply chain, We will systematically promote the steady recovery and high-quality development of the industry.

　　 1? Economic operation of clothing industry

　　 Clothing production growth slows down

With the efficient and accurate coordination of epidemic prevention and control and the acceleration of implementation of various policies and measures, the production of garment enterprises in the areas where the epidemic situation is alleviated has accelerated. In May, the industrial added value of Enterprises above the scale of clothing industry reversed the downward trend and realized positive growth. According to the data of the National Bureau of statistics, in May, the industrial added value of Enterprises above Designated Size in the clothing industry increased by 1.2% year-on-year, 1.5 percentage points higher than that in April; From January to may, the industrial added value of Enterprises above Designated Size in China's garment industry increased by 5.1% year-on-year, and the growth rate slowed down by 1.1 percentage points compared with January April. The growth rate of clothing output slowed down. From January to may, enterprises above Designated Size completed 9.343 billion pieces of clothing, with a year-on-year increase of 0.45%, 5.19 percentage points slower than that of January April. In terms of categories, the output of woven clothing was 3.466 billion pieces, up 0.12% year on year; The output of knitted garments increased by 58 million over the same period of last year.

Figure 1 production growth of clothing industry from January to may in 2022

Source: National Bureau of statistics

　　 Domestic market improved significantly

In May, with the overall improvement of the epidemic prevention and control situation and the implementation of policies such as promoting consumption, the domestic market demand gradually improved, the decline rate of domestic clothing sales narrowed, and both physical and online retail sales improved. According to the data of the National Bureau of statistics, the retail sales of clothing goods of units above the quota in May decreased by 20.1% year-on-year, 5.5 percentage points lower than that in April; From January to may, the total retail sales of clothing goods of units above the quota in China totaled 362.33 billion yuan, a year-on-year decrease of 10.1%, and the decline rate continued to expand by 2.6 percentage points compared with January April. According to the data of China National Business Information Center, the clothing retail sales of key large-scale retail enterprises in May decreased by 29.94% year-on-year, 9.92 percentage points lower than that in April. At the same time, the continuous improvement of logistics smoothness and transportation efficiency plays a certain role in promoting online consumption. From January to may, online retail sales of wearing goods decreased by 1.6% year-on-year, 0.1 percentage point lower than that from January to April.

Figure 2 growth rate of clothing sales in domestic market from January to may in 2022

Source: National Bureau of statistics

　　 Export growth rate increased significantly

With the steady increase of foreign trade policy and the steady progress of enterprises returning to work and production, driven by the stable recovery of international market demand, the gradual opening of logistics blocking points and the accelerated release of early backlog of orders, China's clothing export growth rate has greatly increased and returned to double-digit growth space. According to the data of China Customs, in May, the export of clothing and accessories reached US $15.199 billion, up 24.9% year-on-year, 22.5% higher than that in April; From January to may, China's total exports of clothing and accessories reached US $62.216 billion, up 10.2% year-on-year, 4% higher than that of January April.

Figure 3 export of China's clothing and accessories from January to may 2022

Source: China Customs

The export of knitted and woven garments has been accelerated significantly, and the export of epidemic prevention materials has continued to drop sharply. According to the data of China Customs, from January to may, the export value of knitwear and clothing accessories was 32.404 billion US dollars, an increase of 21.93% year-on-year, 3.11 percentage points faster than that of January April; The export value of woven clothing and accessories was 27.012 billion US dollars, with a year-on-year increase of 17.84%, 3.72 percentage points faster than that of January April; From January to may, the export value of gloves made of plastics and vulcanized rubber reached US $1.62 billion, down 70.4% year-on-year. The export value of protective clothing made of chemical fiber was 490 million US dollars, a decrease of 65.0% year-on-year.

Clothing exports to China, the EU and the United States decreased strongly. According to the data of China Customs, from January to may, China's clothing exports to the United States and the European Union increased by 12.5% and 17.9% year-on-year, 4.2 and 8.6 percentage points higher than those from January to April respectively, accounting for 42.8% of China's total clothing exports, driving the growth of China's clothing exports by 6.1%; China's clothing export to ASEAN increased by 26.3% year-on-year, 6.6 percentage points faster than that in January April; The decline rate of China's clothing export to Japan was significantly narrowed, with a year-on-year decrease of 7.6%, 2.8 percentage points lower than that of January April. Over the same period, China's clothing exports to countries and regions along the belt and road and Latin America maintained rapid growth, with growth rates of 15% and 36.1%, respectively, driving the growth of China's clothing exports by 3.4% and 1.7%. In addition, China's clothing exports to the United Kingdom, Canada and Russia decreased by 9.6%, 9.2% and 34.4% respectively over the same period of the same period of last year, with the decline rates of 3.2%, 2.9% and 1.5% respectively.

Zhejiang and Shandong's clothing export growth has accelerated significantly, while Guangdong's clothing export has narrowed. From January to may, Zhejiang, Guangdong, Jiangsu, Shandong and Fujian, the top five provinces of China's clothing exports, totaled US $45.9 billion, an increase of 11.8% year-on-year, accounting for 73.8% of China's total clothing exports, an increase of 1.1 percentage points over the same period of last year. Among them, Zhejiang's clothing export value was 12.58 billion US dollars, up 29.1% year-on-year, 2.8 percentage points faster than January April; Guangdong's clothing export decreased by 1.9% year-on-year, 1.3% lower than that in January April; The clothing export of Shandong Province increased by 21.7% year-on-year, 7.4 percentage points faster than that of January April; Clothing exports of Jiangsu and Fujian maintained a steady growth, 9.1% and 4.2% respectively. The clothing export of central and western provinces shows obvious differentiation trend, and the clothing export of Xinjiang, Jiangxi, Hunan, Liaoning and Sichuan provinces continues to grow rapidly. Among them, the export growth of Xinjiang, Hunan and Sichuan is as high as 87.3%, 69.7% and 211.7%, while that of Hebei and Hubei provinces continues to fall sharply, with a decrease of 57.2% and 33.5% respectively, and that of Anhui Province decreases by 4.6% year on year.

　　 Industry profits turned negative

In the complex situation of the impact of the epidemic, weakening demand, rising costs, high inventory and other business pressures, China's clothing enterprises are under severe pressure to repair their benefits. In addition, affected by the higher base in the same period of last year, the total profit has turned into negative growth. According to the data of the National Bureau of statistics, from January to may, there were 13053 Enterprises above Designated Size (annual main business income of 20 million yuan and above) in China's garment industry, with an operating revenue of 561.11 billion yuan, a year-on-year increase of 6.13%, and a growth rate of 1.97 percentage points slower than that of January April; The total profit was 23.293 billion yuan, a year-on-year decrease of 4.57%, and the growth rate was 6.44 percentage points lower than that of January April. The operating efficiency of enterprises continued to slow down, and the profitability accelerated to decline. From January to may, the turnover rate of finished products of Enterprises above Designated Size in the clothing industry was 11.89 times / year, a year-on-year decrease of 4.87%; The operating cost increased by 6.92% year-on-year, which was 0.79 percentage points higher than the growth rate of operating revenue. The operating cost per 100 yuan of operating income included 85.73 yuan of cost, an increase of 0.63 yuan over the same period in 2021; The profit margin of operating income of garment enterprises above designated size was 4.15%, which was 0.47 percentage points lower than that in the same period of 2021, and the decline range was 0.17 percentage points larger than that from January to April.

Table 1 main benefit indexes of clothing industry from January to may in 2022

Source: National Bureau of statistics

　　 Investment maintained rapid growth

Driven by various tax preferences and financing support policies, such as steady growth of the country, assistance to enterprises, and increased financing support policies, garment enterprises continued to deepen transformation and upgrading, actively expanded effective investment in technological transformation and upgrading, intelligent manufacturing and regional layout adjustment, and affected by the low base factor in the same period of last year, China's clothing industry investment achieved rapid rebound growth, The growth rate fell month by month. According to the data of the National Bureau of statistics, from January to may, the investment in fixed assets of China's clothing industry increased by 32.7% year-on-year, 24.4% higher than that in the same period in 2021, and 3.6% lower than that in January April.

Figure 4 growth rate of fixed assets investment in clothing industry from January to may in 2022

Source: National Bureau of statistics

　　 two ? Development characteristics of clothing industry

Supply and consumption work together

Promote the gradual recovery of domestic consumption market

Affected by the epidemic situation in April, the enterprises suffered heavy losses of shutdown and production, and transportation was seriously hindered, and a large number of orders were overstocked. With the effective control of the epidemic situation in May, the logistics transportation and supply chain were gradually opened and repaired, and the operating rate of enterprises rose rapidly. At the same time, thanks to a series of tax reduction and fee reduction policies and measures launched by the state and local governments, enterprises resumed work and production in an orderly manner, and the orders overstocked due to the epidemic situation began to speed up production and delivery.

With the overall improvement of domestic epidemic prevention and control, the order of production and life has been restored in an orderly manner, and the vitality of the consumer market has gradually rebounded. Beijing, Guangzhou, Shenzhen, Zhejiang and other places have successively formulated measures to promote the sustained recovery of consumption. By issuing consumption vouchers or subsidies, they have obtained positive market reaction in promoting the steady recovery and growth of consumption. The annual "618" mid year boost also led to a round of consumption boom, which will be very conducive to the recovery of consumption in the second half of the year.

International market demand continues to recover

Boost the steady growth of clothing export

Since this year, with the general relaxation of overseas epidemic control, the demand for clothing in major foreign markets has continued to warm up. In May, the retail sales of clothing and apparel (including footwear) in the United States was 26.32 billion US dollars, up 6.1% year-on-year; UK textile, clothing and footwear sales of 4.14 billion pounds (about US $5.07 billion), up 16.3% year-on-year. The recovery of foreign market demand has promoted the steady growth of China's clothing export. At the same time, the state has issued a series of stable foreign trade policies, such as the opinions on promoting the stability and quality of foreign trade, so as to create good conditions for export. Since the beginning of May, with the release of foreign trade orders, the supply chain of foreign trade has been restored. However, it should also be noted that the global economic development is facing enormous downward pressure. In June, the world bank cut its global economic growth forecast for 2022 to 2.9%, and the world economic recession will lead to a contraction in external demand. In addition, the import ban of cotton products related to Xinjiang implemented by the United States and the continuous recovery of clothing industry chain in Southeast Asia and South Asia also make China's clothing industry export face greater competitive pressure and unstable factors.

A new round of transformation and upgrading of clothing industry has achieved remarkable results

In the face of the impact of the epidemic, local governments have accelerated the restructuring of the garment industry, promoted the transformation and upgrading of the digital and intelligent industry, and achieved remarkable development results. Yudu, Jiangxi Province, adheres to the textile and garment industry as the first industry, complies with the new development situation of digital economy, promotes the transformation and upgrading of textile and garment industry from traditional processing to digital, networked and intelligent, and effectively realizes the "fission" development of garment industry. Linping, Zhejiang Province, through the establishment of Zhejiang Province clothing industry innovation service complex, build "fashion e home" application scene, complete the digital transformation of small and medium-sized traditional garment processing enterprises, and realize the "group development" from the low-cost and small-scale workshops to the digital park. Shaxi, Zhongshan, seizes the opportunity of live e-commerce, encourages clothing enterprises to expand marketing channels through live e-commerce, promotes the transformation and upgrading of traditional clothing industry, and strives to cultivate new driving forces for economic growth. It is not only helpful for enterprises to hedge against the adverse impact of the epidemic and economic downward pressure, but also an inevitable way for enterprises to cope with challenges and achieve high-quality development.

(source: China clothing association)