Knitting Industry Association: Data Shows The Economic Operation Of The Knitting Industry From January To September

On the whole, from January to September this year, China's knitting industry was under great pressure. Affected by the downturn in market demand, the scale of industry production and sales has declined, and overseas orders have continued to decline. But at the same time, the overall economy of China has continued to advance steadily, and the domestic market has shown a trend of gradual improvement.

01 Year on year decline in production and sales scale

From January to September, clothing production of enterprises above designated size decreased by 9.39% year on year, 1.55 percentage points more than that of the first half of the year; Among them, the production of knitted clothing decreased by 5.97% year on year, 0.68 percentage points lower than that in the first half of the year. The proportion of knitted clothing output in the total clothing output is 66.36%, 4.23 percentage points higher than that in 2022.

The industry revenue slightly improved compared with the first half of this year. From January to September, the main business income of enterprises above designated size in the knitting industry decreased by 4.72% year on year, 1.47 percentage points lower than that in the first half of the year. Among them, the business income of enterprises above designated size of knitted fabrics increased slightly by 0.11% year-on-year, 2.63 percentage points higher than that of the first half of the year; The operating income of enterprises above designated size of knitted clothing decreased by 7.33% year on year, 0.95 percentage points lower than that in the first half of the year.

02 Quality and efficiency pressure still exists in the industry

Since this year, industry profits have continued to shrink year-on-year. From January to September, the total profit of enterprises above designated size in the knitting industry decreased by 6.6% year on year, 1.89 percentage points lower than that in the first half of the year. The total profit of knitted fabrics fell 3.82% year on year; The total profit of knitted clothing decreased by 7.81% year on year.

From January to September, the profit rate of enterprises above designated size in the knitting industry was 3.87%, which was basically the same as that in the first half of this year; The loss area was 24.64%, nearly 4 percentage points lower than that in the first half of the year; The turnover rate of total assets and the turnover rate of finished products slowed down year on year, and the operation quality still needs to be improved.

03 Marginal improvement in foreign trade

From January to September, China's export of knitted products reached US $79.221 billion, down 10.57% year on year, 0.32 percentage points more than that in the first half of the year. Among them, the export of knitted fabrics was 16.411 billion US dollars, down 12.4% year on year; The export of knitted clothing and accessories reached US $62.810 billion, down 9.1% year on year. In September, China's exports of knitted products fell 3.54% year on year, significantly narrowing the month on month decline.

From the perspective of main export markets, the export volume of China's knitting products to several major export destination countries still kept shrinking, and the decline was basically the same as that in the first half of the year.

From January to September, China's exports of knitting products to the United States, ASEAN, the European Union and Japan were US $14.955 billion, US $131.36 billion, US $11.274 billion and US $5.192 billion, down 15.60%, 13.53%, 20.05% and 11.86% year on year respectively. Among ASEAN countries, except Brunei and Singapore, which still maintained growth, other countries generally suffered a serious decline. In the past two months, China's exports of knitted products to the United States achieved positive growth. In September, China's exports to the United States increased by 11.66% year on year, releasing a signal of demand recovery.

It is worth noting that China's exports to Central Asia, the Middle East, Russia and other regions and countries are growing against the trend. From January to September, the export of China's knitting products to the five Central Asian countries increased by 46.97% year on year; Export to Russia increased by 25.99% year on year; During the same period, exports to Turkey, Nigeria, Brazil and other countries also increased significantly.

In terms of market share, since this year, the import demand of knitting products from major developed economies such as the United States and the European Union has declined, while the share of Chinese products in the above markets has also declined. From January to July, the import volume of knitting products from the European Union dropped by 12.55% year on year, of which the import to China dropped by 14.89% year on year; From January to August, the imports of knitted products from the United States fell by 27.71% year on year, of which the imports from China fell by 32.93% year on year; From January to August, Japan's imports of knitted products increased by 1.52% year on year, of which imports from China fell by 4.15% year on year.

At present, China, Vietnam, Cambodia, Bangladesh and India are the top five countries of origin of US knitted products imports. From the data of the past 10 years, China's market share in the United States has declined significantly, by nearly 15 percentage points; At the same time, Vietnam's share has increased significantly, increasing by nearly 7 percentage points in the past decade, further narrowing the gap with China.

In the EU region, China and Bangladesh are the top two importers of knitted products, accounting for more than 50% of the total. With the development of the past decade, Bangladesh's share has been close to China's, and the proportion difference between China and Bangladesh has gone from leading 19% to less than 3%. In addition, due to the influence of entrepot trade, China's future exports to Japan or facing the squeeze from Vietnam and other countries deserve attention and attention.

From the perspective of category breakdown, the export volume of most products from January to September declined year on year, among which the decline of knitted children's wear, sportswear and knitwear was more obvious, with a year-on-year decline of 24.33%, 14.57% and 12.85% respectively.

From the data of local customs, the export volume of Zhejiang, Guangdong, Fujian, Jiangsu and Shandong, the five major textile provinces, declined from January to September compared with the same period last year. Among them, the export volume of Jiangsu and Fujian decreased significantly, by 20.53% and 20.41% respectively year on year.

The export of Xinjiang, Guangxi, Sichuan, Hubei and other central and western provinces and cities grew rapidly, with export growth rates of 61.73%, 45.74%, 37.22% and 18.67% respectively. At present, the total export volume of the five eastern coastal provinces accounts for 76.27% of the national total, which is 4.96 percentage points lower than that in 2020. The industry is developing in a coordinated way in the east, west, and east. In the future, with the continuous release of the Belt and Road policy effect, it will create more favorable opportunities for the export of central and western China.

In addition, according to Chinese customs data, from January to September, China exported more than 98000 round knitting machines and 51000 warp knitting machines, down 17.55% and 9.66% year on year respectively; Over the same period, the export volume of flat knitting machines was more than 55000, up 74.43% year on year. From the perspective of export distribution, India, Vietnam, Bangladesh, Turkey, etc. are the main export destinations of China's knitting machinery, and the sum of the four countries accounts for about 50% of China's total export of knitting machinery.

04 The domestic market continued to recover

From January to September, China's retail sales of consumer goods totaled 34210.7 billion yuan, up 6.8% year on year. Among them, the retail sales of clothing, shoes and hats, knitwear and textiles above the designated size were 993.5 billion yuan, up 10.6% year on year. From January to September, the online retail sales of physical goods reached 9043.5 billion yuan, up 8.9% year on year, including 9.6% growth of clothing goods. At the same time, according to the monitoring data disclosed by the China National Business Information Center, from January to September, the retail sales of 50 key large-scale retail enterprises across the country achieved a cumulative year-on-year growth of 10.5%, of which the clothing market also achieved a double-digit year-on-year growth.

In addition, according to the data of the National Bureau of Statistics, China's manufacturing purchasing managers' index (PMI) was 50.2% in September, up 0.5 percentage point from the previous month, returning to the expansion range, and China's economic prosperity level rebounded. Among them, the production index was 52.7%, up 0.8 percentage points over the previous month, and the pace of expansion of manufacturing production was accelerated; The new order index was 50.5%, up 0.3 percentage points over the previous month, indicating that the manufacturing market demand continued to improve.

At present, there are still many unstable and uncertain factors in the world economy. The global economy is facing the dual challenges of inflation and low growth. The Russia Ukraine war and the Palestine Israel conflict have further exacerbated the global geopolitical risks. The future development of the industry still faces considerable pressure. In the fourth quarter, China's economy is expected to further recover. Several shopping festivals, such as Double 11 and Double 12, have helped usher in the peak sales season. The industry is expected to usher in a wave of restorative growth after overseas de stocking. However, the decline in overseas demand and lack of endogenous power are still difficult to improve in the short term. The industry should remain determined, innovate and break through, pay attention to the development opportunities in Northeast Asia brought about by the opening of the ports along the Belt and Road and Vladivostok and the mutual visa exemption of Chinese and Russian ports after the RCEP Agreement came into force, grasp the development opportunities of industrial development paradigm transition supported by digital, green, science and technology, and culture in the profound transformation of the global supply chain, and accelerate the construction of a modern industrial system, Form new quality productivity and realize high-quality development of the industry.

(Source: China Knitting Industry Association)