Analysis On The Operation Of Home Textiles Industry In The First Six Months

Secretariat of China Knitting Industry Association: since 2022, due to the increasingly complex international situation and frequent domestic epidemic situation, China's macroeconomic operation pressure has increased, the growth rate of industrial production and efficiency has slowed down, and the decline of manufacturing industry is more obvious. The domestic demand market was significantly affected by the epidemic, the sales scale was reduced in an all-round way, and the market consumption intention declined. In this external environment, China's knitting industry actively respond, strengthen adjustment, and maintain the stability and development of the industry.

01 industry operation

(1) the growth rate of scale continued to slow down

In the first half of this year, the overall operating income of Enterprises above Designated Size in China's knitting industry has increased, but the growth rate has dropped significantly, and the growth of industry scale has shown a slowing trend.

According to the statistics of the National Bureau of statistics, from January to June, the operating income of Enterprises above Designated Size in the knitting industry increased by 6.35% year-on-year, 0.61% higher than that of the textile industry. The growth rate decreased by 6.95% compared with the whole year of last year, and decreased by 5.91% compared with the first quarter of this year; Among them, the operating income of Enterprises above the designated size of knitted fabrics increased by 9.23% year-on-year, and the business income of Enterprises above the designated size of knitted garments increased by 4.66% year-on-year, and the growth rates decreased by 10.39% and 5.18% respectively compared with the whole year of last year, and decreased by 8.41% and 4.62% respectively compared with the first quarter of this year.

Output growth slowed down obviously, and showed negative growth in June. From January to June this year, the total output of knitted garments of Enterprises above designated size decreased by 0.56% year-on-year, and the growth rate was 11.42% lower than that of the whole year last year, and 4.33% lower than that of the first quarter of this year.

(2) production costs remain high

Since this year, the industry has been operating at a high level, and the growth rate of operating cost has been higher than that of operating income.

According to the National Bureau of statistics, from January to June, the operating costs of Enterprises above Designated Size in the knitting industry increased by 7.56% year-on-year, 1.21 percentage points higher than the operating income. Among them, the operating costs of Enterprises above the designated size of knitted fabrics increased by 9.89% year-on-year, 0.66 percentage points higher than the operating income; The operating cost of Enterprises above the designated size of knitted apparel increased by 6.16% year-on-year, 1.5 percentage points higher than the operating income.

The rapid growth of cost and the high proportion of operating cost in operating revenue have seriously compressed the profit space of enterprises. From January to June, the cost per 100 yuan of operating income of knitting enterprises above designated size increased by 0.99 yuan compared with the same period of last year, which was equivalent to the decrease of profit margin by nearly 1 percentage point.

In the first half of the year, the national PPI (Industrial producer price index) rose by 7.7%, among which the price of chemical fiber manufacturing industry increased by 7.9% year-on-year, while the price of textile and clothing industry only rose by 0.9%, far below the price level of chemical fiber. In addition, from January to June, the purchase price of industrial producers increased by 10.4%, among which the price of textile raw materials increased by 8.6%, which was significantly higher than the ex factory price of textile and clothing.

In addition, according to the analysis of China Textile Economic Research Center, since this year, the price of raw materials in the textile industry is high, and in the weak demand market environment, the cost is difficult to be transmitted along the industrial chain, seriously squeezing the profit space of enterprises. Oil, natural gas and other international energy prices fluctuate at a high level. Dyestuffs and chemicals have increased by nearly 30% year-on-year. Steam prices in Jiangsu and Zhejiang continued to rise month on month from March to May. In the case of weak market demand, it is difficult to transmit cost pressure downward, and the profitability of enterprises has generally deteriorated. Although the price of cotton raw materials has been declining since June, the overall level of raw material prices in the first half of this year is still at the high level in recent years.

(3) continuous improvement of operation efficiency

The increase of cost seriously affects the profitability of the industry. In the first quarter, the profit decreased obviously, and the second quarter began to show a certain extent of growth, reflecting the determination and action of the industry and enterprises to actively respond.

From January to June, the total profits of Enterprises above Designated Size in the knitting industry increased by 13.31% over the same period last year; Among them, the total profit of knitted fabrics increased by 1.69% year-on-year, and that of knitted garments increased by 20.20%. The profit margin of Enterprises above Designated Size in the knitting industry from January to June was 4.24%, with a year-on-year increase of 0.26 percentage points, and the growth rate was 0.97 percentage points higher than that in the first quarter of this year.

Since the beginning of this year, enterprises have actively improved their external management. From January to June, the proportion of three items of expenses of Enterprises above Designated Size in the knitting industry accounted for 7.09%, down 0.82 percentage points compared with the same period of last year. At the same time, with the continuous promotion of textile enterprises returning to work and production throughout the country, the deficit situation of Enterprises above Designated Size in the knitting industry has also improved. From January to June, the losses of Enterprises above Designated Size in knitting industry were 26.80%, 3.66 percentage points lower than that in the first quarter.

4. Export maintained a rapid growth

Since this year, China's textile, clothing and knitted products exports have maintained a good growth trend. In the first half of the year, China's textile and clothing exports reached 156.49 billion US dollars, up 11.7% year on year. Among them, textile exports reached 76.32 billion US dollars, up 11.3% year on year; Clothing exports reached US $80.17 billion, up 12.0% year on year.

From January to June, China's export of knitted products reached 54.343 billion US dollars, with a year-on-year increase of 21.37%. Among them, the export of knitted fabrics reached 12.618 billion US dollars, an increase of 18.8% year-on-year; The export of knitwear was 41.725 billion US dollars, up 22.1% year on year.

From the perspective of major export markets, China's exports to the United States, ASEAN and the European Union still maintain a high growth rate. Compared with the same period last year, the export of China's knitting products to ASEAN and Japan increased by US $32.7 billion to US $42.7 billion; In addition to the United States, Europe, Japan and ASEAN, exports to other markets totaled US $21.591 billion, up 13.22% year-on-year.

The growth momentum of exports to the top three markets is particularly prominent. From January to June, China's knitted products exported US $10.872 billion, US $10.258 billion and US $8.249 billion to the US, ASEAN and EU markets, respectively, up 31.50%, 29.83% and 35.57% year-on-year. These three markets accounted for 54.06% of China's knitwear exports, an increase of 4.36 percentage points over the same period of last year.

(5) the domestic market is not active enough

Affected by the epidemic situation, domestic consumption of textile and clothing products fell again. Due to the frequent occurrence of the epidemic in many places and the limited flow of people and logistics, the online and offline sales were greatly impacted.

In the first half of this year, the total retail sales of consumer goods reached 21.04 trillion yuan, a year-on-year decrease of 0.7%, and the growth rate was 4 percentage points lower than that in the first quarter of this year; Among them, the total retail sales of clothing, shoes and hats, needles and textiles of units above the designated size was 628.2 billion yuan, a year-on-year decrease of 6.5%, and the growth rate was 5.6 percentage points lower than that of the first quarter. Retail sales increased by 2.5% compared with the same period of last year, with a year-on-year growth rate of 1.4% in online goods. At the same time, according to the data center of Dongfang fortune.com, since April this year, China's consumer confidence index has fallen below 90 points, which is the first time that it has fallen below the critical value in recent five years. This further shows that the current domestic consumer confidence is insufficient, the market demand is weak, and the process of economic recovery is slowing down. At the same time, it also causes the order reduction of small and medium-sized enterprises in the knitting industry, The main pressure source of insufficient start-up.

Forecast of industry trend in the second half of 2002 and Countermeasures

Although textile enterprises are moving forward under pressure, we still need to see that the domestic economic fundamentals are good and the effect of policies and measures will gradually appear. We should strengthen confidence in development and make full use of the window period of policy measures. The international economic and market situation will continue to be in complex changes. Since June 21, this year, the U.S. frontier related Act came into effect, and China's textile foreign trade enterprises may face certain pressure. According to the estimation of China Textile Import and Export Chamber of Commerce, it is estimated that in the second half of this year, China's textile and garment order transfer may be accelerated, with cotton textile order transfer of about $2 billion, and mainly transferred to India and other countries. Enterprises should calm down and actively respond.

With the continuous improvement of the domestic epidemic prevention and control situation and the acceleration of the implementation of a package of policies and measures to stabilize the economy, the National Bureau of Statistics predicts that the overall recovery of China's economy will accelerate in the second half of the year. In June, China's Manufacturing Purchasing Managers Index (PMI) rose to the expansion range, reaching 50.2%, and the overall prosperity level of the manufacturing industry improved. The production index and new order index were 52.8% and 50.4% respectively, both of which returned to above the critical point, rising by 3.1% and 2.2% compared with the previous month, indicating that the market demand of the manufacturing industry has improved and production has accelerated to recover.

In order to improve consumer confidence, enhance domestic demand and increase orders in the second half of the year, the government and enterprises should actively respond and take effective measures to improve the status quo in time. On the one hand, a series of policies are conducive to the healthy operation and development of the industry; On the other hand, we should seize the favorable opportunity and actively adjust to promote the stability and improvement of the industry.

First, local governments should implement a package of national policies and measures to stabilize the economy, strengthen the supervision of policy implementation, and ensure the effective implementation of policies supporting SMEs' financing and job stability. At the same time, financial support should be strengthened and various measures should be taken to help small and medium-sized enterprises to solve their difficulties.

Second, we should actively promote the implementation of the "three products" strategy of increasing varieties, improving quality and creating brands in the consumer goods industry, enhance the core competitiveness and brand influence of products, and accelerate the consumer goods industry to the middle and high-end level. Specifically, for the knitting industry, it is necessary to enhance the collaborative innovation ability of the industrial chain, strengthen the digital management ability of the brand, promote the standard to lead the industry, and accelerate the cultivation of compound talents.

Third, actively promote the "three-year action plan for digital transformation of textile industry", deepen the integration and development of industrialization and industrialization, improve the level of enterprise digital integration application, and accelerate the construction of digital and intelligent production lines and workshops. (focus on the cultivation and promotion of automatic yarn change (tube), automatic cloth dropping, real-time on-line measurement and adjustment of yarn length and constant tension adaptive control system, intelligent detection and automatic classification system of knitted fabric defects, broken needle monitoring, virtual design and process simulation, line forming technology, etc.)

Fourth, as the epidemic situation in Europe tends to stabilize, some well-known textile industry exhibitions such as HEIMTEXTIL, TW / apparel sourcing Paris, Asia apparel Expo have opened offline entity exhibitions since June this year. However, the world's epidemic prevention and control measures and entry-exit policies have brought a lot of uncertainties for Chinese enterprises to participate in international exhibitions. In order to help enterprises obtain orders and open up the international market, local governments need to encourage foreign trade enterprises to go abroad through the support of policies and funds, develop new products, understand the new situation, tap new channels and accumulate new customers through the exhibition platform.

Fifthly, enterprises should pay more attention to the external environment and environment, optimize the production and marketing channels, optimize the production environment and market efficiency, optimize the production environment and market efficiency.

China Household Textile Industry Association: in the first half of this year, the global economic recovery slowed down, inflation and currency contraction, geopolitical risks and epidemic situation occurred repeatedly all over the world, the cost of raw materials was high, the overall market demand was phased down, and product prices were under pressure, which seriously affected the normal production and operation of the home textile industry. Under the unprecedented multiple pressures, the home textile industry has been forging ahead. By June this year, various economic indicators have returned to the level of the same period last year, showing the resilience of the home textile industry.

I. overall pressure on industry operation

Since the beginning of this year, due to the pressure of raw material cost, the logistics pressure caused by the multi-point spread of domestic epidemic situation, and the limited orders of enterprises, the industry efficiency has dropped sharply. After May, with the domestic epidemic prevention and control situation getting better and the national package of stable growth policies and measures gradually took effect, the operation of home textile industry has been gradually restored. According to the data of the National Bureau of statistics, in the first half of the year, the business income of domestic textile enterprises above designated size increased slightly by 0.08%, the profit gradually narrowed from - 34% at the beginning of the year, and increased by 1.74% from January to June.

(1) export growth slowed down

Since 2022, the growth rate of China's domestic textile exports has been narrowing. According to the data of the General Administration of customs, from January to June, China exported 22.668 billion US dollars of home textile products, a year-on-year increase of 3.48%, of which the export volume decreased by 2.55%; Export unit price increased by 6.18% year on year. On the whole, the growth rate of export volume slowed down, the number of exports turned from positive to negative year-on-year, and the export unit price remained high year-on-year.

From the perspective of the six major categories of home textile products, the export volume of other types of home textile products has maintained a positive growth, except that the export value of bedding products decreased year on year.

From the perspective of major export markets, the growth rate of traditional markets in the United States, Europe and Japan is lower than that in other markets. From January to June this year, China exported 9.598 billion US dollars of home textile products to us, Europe and Japan, a year-on-year decrease of 4.23%, and domestic textile products exported to other markets reached 13.07 billion US dollars, an increase of 9.97% year-on-year.

(2) pressure recovery of domestic sales

According to the data of the National Bureau of statistics, from January to June this year, the domestic sales value of domestic textile enterprises above designated size increased by 2.39% year on year. Due to the domestic epidemic situation in March and April this year, the production and operation of enterprises were suspended, and the domestic sales of the industry decreased significantly year on year. After May, with the domestic epidemic situation gradually under effective control, the production and operation of enterprises gradually recovered, but the overall recovery process slowed down. According to the survey, the number of new textile enterprises increased by 2.5 points in the quarter compared with that of "new textile enterprises".

II. Major problems faced by the industry and trend prediction

(1) the shortage of market orders is the primary problem

Home textile enterprises generally believe that the reduction of market orders is the primary problem facing difficulties, especially for small and medium-sized enterprises. In the first half of this year, due to the outbreak and control of the domestic epidemic situation, the textile enterprises in the domestic textile industry had the phenomenon of regional periodic shutdown. According to the results of the "questionnaire survey on production and operation and problems faced by enterprises" carried out by China Home Textile Association, the proportion of domestic textile enterprises with stoppage in the range of two weeks to one month is relatively high, accounting for 54%. The main factors of enterprise shutdown are epidemic situation control, insufficient orders and insufficient supply of raw materials. At the same time, "the fluctuation of epidemic situation affects production and life" is also the main problem that the interviewed enterprises have encountered in domestic sales.

Orders decreased, and enterprise inventory increased in the second quarter. According to the results of "enterprise management questionnaire survey" of China Textile Federation, the proportion of enterprises with increased finished product inventory in the second quarter was as high as 63.6%.

(2) cautious and optimistic about the third quarter forecast

According to the results of the questionnaire survey on business management of enterprises in the second quarter of China Textile Federation, 34.4% of the domestic textile enterprises expected to increase their order demand in the third quarter, which slightly increased by 1.1% compared with the increase in the second quarter; 51.6% of the enterprises think that the output of their main products will increase in the third quarter, which is 18.3 percentage points higher than that in the second quarter. 18.2% of the enterprises thought that the overall operation of the industry was optimistic in the third quarter, which was 9.1 percentage points higher than that in the second quarter; 33.3% of the enterprises were not optimistic, down 3.1 percentage points from the second quarter. On the whole, domestic textile enterprises are cautious and optimistic about the industry operation in the third quarter.

(source: China Household Textiles Association)