Operation Of Textile Machinery Industry In The First Three Quarters

In the first three quarters of 2023, the world economic growth will slow down significantly, and the global market demand will be weak. Although the domestic market shows strong resilience, the industry competition will intensify and the operating pressure will not decrease. According to the data from the National Bureau of Statistics, the main economic indicators of the industry in the first three quarters continued to fall slightly. Due to the impact of weak demand and high base in overseas markets on the export of textile machinery, the export pressure is obvious, and the industry still faces greater pressure.

From the perspective of sales volume of textile machinery in various sub industries, the overall growth of weaving machinery, spinning and knitting machinery were relatively stable, and the sales volume of chemical fiber, nonwoven, printing and dyeing machinery declined.

Operation quality and efficiency

The industry income continues to be under pressure, and the profit level drops. According to the statistics of the National Bureau of Statistics, from January to September 2023, the operating revenue of textile machinery enterprises above designated size will decrease by 1.12% year on year, 0.38 percentage points less than that from January to June. Since 2023, the growth of the industry's operating income has always been in a negative growth range, but the decline has narrowed. The total profit of textile machinery enterprises above designated size decreased by 2.18% year on year, 8.61 percentage points lower than that from January to June. The profit rate of operating revenue was 6.56%, a decrease of 0.13 percentage points over the same period of the previous year. The loss of loss making enterprises increased by 12.20% year on year; The loss area was 23.10%, 2.76 percentage points higher than the same period last year.

The industry cost decreased more than the revenue, and the proportion of three fees decreased slightly. According to the statistics of the National Bureau of Statistics, from January to September 2023, the total cost of textile machinery enterprises above designated size will decrease by 1.29% year on year, 0.17 percentage points higher than the decrease of operating revenue. Operating costs decreased by 1.94% year on year, accounting for 89.96% of the total cost; The proportion of "three expenses" in the whole industry was 9.13%, a decrease of 0.39 percentage points over the same period last year, of which: sales expenses increased by 2.37% year on year, accounting for 3.68% of the total cost; The administrative expenses increased by 3.52% year on year, accounting for 5.83% of the total cost; Financial expenses increased by 52.73% year on year, accounting for 0.53% of the total cost.

The industry's asset liability ratio declined slightly. According to the statistics of the National Bureau of Statistics, from January to September 2023, the total assets of textile machinery enterprises above designated size will decrease by 1.12% year on year, and the asset liability ratio will be 57.6%, 1.22 percentage points lower than that of the same period last year, and the asset liability ratio of industrial enterprises above designated size will be equal to 57.6%.

Trade receivables and finished goods inventory decreased. According to the statistics of the National Bureau of Statistics, the accounts receivable of textile machinery enterprises above designated size from January to September 2023 decreased by 3.03% year on year, 16.48 percentage points lower than the same period of the previous year. From January to September 2023, the inventory of finished products of textile machinery enterprises above designated size decreased by 5.92% year on year, 8.29 percentage points lower than that of the same period last year.

Survey of industrial enterprises

The Textile Machinery Association conducted an investigation on the operation of 111 textile machinery enterprises in the first three quarters of 2023. From the summary results, the overall pressure of enterprise operation is obvious. According to the survey, 34.6% of enterprises' orders exceeded the level of the same period last year, and 60% of enterprises' capacity utilization rate was above 80%. At present, the primary problem faced by enterprises is the lack of market demand at home and abroad. Although affected by the overall economic downturn, the judgment on the industry situation in the first three quarters of 2023 is better than that in the first half of the year.

Import and export

According to customs statistics, from January to September 2023, China's textile machinery imports and exports totaled US $5.635 billion, a year-on-year decrease of 15.54%. Including: textile machinery import of 2.253 billion US dollars, a year-on-year decrease of 10.36%; Exports reached US $3.382 billion, down 18.67% year on year.

Overview of textile machinery products import

From January to September 2023, textile machinery will be imported from 64 countries and regions, with a total import of 2.253 billion US dollars, a year-on-year decrease of 10.36%.

In terms of the category of imported products, the total import volume of chemical fiber machinery ranked first, with a total import volume of 871 million US dollars, up 32.03% year on year, accounting for 38.67% of the total import volume; In addition to chemical fiber machinery, other major categories of products have decreased in varying degrees, and nonwoven machinery has the largest decline.

Overview of textile machinery products export

From January to September 2023, China exported textile machinery to 195 countries and regions for US $3.382 billion, a year-on-year decrease of 18.67%.

In terms of export product category, the export volume of knitting machinery was 879 million US dollars, a year-on-year decrease of 14.53%, accounting for 25.98%, ranking first. The seven categories of products showed different declines.

From the perspective of export countries and regions, from January to September 2023, the total amount of exports to India, Vietnam, Turkey, Bangladesh and the United States accounted for 53.49% of the total export volume, a year-on-year decrease of 19.91%. It is the main country and region of China's textile machinery exports.

The amount of textile machinery exported to countries and regions along the "Belt and Road" was 2.529 billion US dollars, a year-on-year decrease of 19.89%, accounting for 74.79% of all exports, of which exports to Northeast Asia, Central and Eastern Europe and Central Asia have increased.

Industry situation outlook

Since this year, the global economy has continued to recover slowly and show resilience, but the growth rate has continued to decline. Economic growth still faces multiple risks and challenges. Risks such as commodity price fluctuations, increasing geopolitical fragmentation, high inflation, low productivity and population growth are still hindering the global economic recovery. The International Monetary Fund (IMF) predicts that the global economic growth will slow down from 3.5% in 2022 to 3.0% in 2023. China's economic growth is under great pressure. The growth rate of investment, consumption and export has slowed down, and the economic recovery has been zigzagging. In the first two quarters, China's economy was low, medium and high, and in the third quarter, it was stable and continued to improve. The IMF also raised China's growth forecast for 2023 to 5.4% due to the stronger than expected economic growth performance in the third quarter and a series of recently released policies, 0.4 percentage points higher than the forecast in October. Positive signals have begun to appear.

At present, China's textile industry is facing the pressure of shrinking external demand and benefit restoration. At the same time, international competition is intensifying. The resilience of the textile industry and its ability to withstand downside risks are tested. However, China's textile industry is in a critical period of accelerating the transformation of new and old drivers and promoting high-quality development, which contains huge development opportunities. With the continuous effectiveness of China's policies and measures, the continuous release of transformation and upgrading potential, and the continuous enhancement of the driving force of business entities, China's super large, constantly upgrading and iterative domestic demand market will provide important support for the high-quality development of the textile industry. The domestic textile market is the basis for the development of China's textile machinery industry. The domestic demand market will provide a stable market space for the textile machinery industry, Although the global market demand is insufficient this year, the overseas market is still an important growth point of China's textile machinery industry in the long run. Green, recycling and digitalization are the development direction of the textile industry. As an important support of the textile industry, the textile machinery industry should seize the opportunity to promote the transformation and upgrading of the industry to the direction of digitalization, intelligence, greening and integration, so as to realize the development of the industry to a higher level.

Conditions of various industries

Spinning machinery

From the statistical data, the overall operation of spinning machinery in the first three quarters of 2023 is basically stable. The sales volume of domestic ring spinning machines increased by 32.4% year on year. Among them, Xinjiang and other regions have many new and technological transformation projects, which has driven the demand for various ring spinning equipment. However, the sales of rotor spinning machines and air jet vortex spinning machines in China began to fall after the record high last year, but compared with the same period of previous years, they were only lower than the same period of last year, indicating that the market demand for short process equipment remained hot. The export of ring spinning frame and rotor spinning frame declined significantly, of which the amount of ring spinning frame and rotor spinning frame decreased by 62.2% and 41.8% respectively, indicating that the main export markets of China's spinning equipment, such as Southeast Asia and other countries and regions, saw a significant decline in demand for new and transformation projects. The main export countries of spinning machinery hosts are Vietnam, India, Turkey, Pakistan, Bangladesh, etc.

Since this year, due to factors such as high global inflation and geopolitical risks, the economy has remained sluggish, the international market demand is insufficient, and exports will continue to be weak. Various economic stabilization policies have been introduced in China, but the overall improvement effect has not yet been fully shown. At present, the new orders of enterprises have decreased, and it is expected that they will still face greater downward pressure in the fourth quarter.

weaving machinery

In the third quarter of 2023, the production and sales of weaving machinery increased steadily, and the foreign trade export situation was better than expected. The production and sales continued to increase year on year. First, the demand for weaving equipment from the changing fashion trend and fabric style is gradually recovering; Second, the development of Xinjiang, Henan, Anhui and other industrial clusters has played a supporting role in the sales of weaving machinery; Third, the export situation is still dominated by India and Bangladesh, and the demand for weaving machinery in Russia, Uzbekistan, Pakistan, Turkey and other markets is increasing. However, in the face of fierce competition in product homogenization, sales prices and payment methods and other complex situations, the operating profit of enterprises has been compressed. In the downstream market, the production situation of clothing, home textile, industrial use and other industries in the first three quarters is still under pressure, but it has improved compared with the first half of the year. The capacity utilization rate of user enterprises has rebounded quarter by quarter, and the operating revenue of wool textile, silk, filament weaving and other industries has achieved positive growth year-on-year.

Looking forward to the fourth quarter of 2023, affected by insufficient terminal demand and continuous complex changes in the supply chain structure of the textile market, except for India and Bangladesh, enterprises can focus on Russia, Central Asia, Africa and other emerging markets; With the advancement of domestic textile cluster transfer process, we can focus on Xinjiang, Hebei, Shandong, Anhui, Hubei and other markets. Weaving machinery enterprises need to constantly improve product quality in the current window period to enhance the international competitiveness of domestic equipment, and at the same time, expand the equipment application field to achieve differentiated development according to the needs of the market segment. Supported by the coordinated efforts of the national policy of steady growth and expansion of domestic demand and industrial cluster construction, together with the advent of the double festival sales season, the market demand has recovered steadily from the third quarter.

Knitting machinery

In the first three quarters of 2023, among the three major types of knitting machinery, the circular knitting machine industry remained stable, the flat knitting machine industry rebounded, the overall operation of the warp knitting machine industry increased slightly, and the performance of the subdivided industries was differentiated.

The circular weft knitting machine industry maintained a stable running trend in the first three quarters. In the first quarter, the market of circular knitting machine enterprises entered a dull period after they produced products ordered years ago. From the beginning of the second quarter, thanks to the diversified application of knitted fine gauge fabric products, the domestic market demand for fine gauge circular weft knitting machines has increased, and the sales volume has increased significantly. In the third quarter, with the increase of new machines in the market, the sales of circular weft knitting machines fell back. In terms of overseas market, under the background of the downward fluctuation of the world economy and the overall contraction of foreign demand, the export of circular knitting machines declined significantly. Among the traditional key export markets of circular knitting machines, exports to India and Indonesia increased year on year, while those to Vietnam, Turkey and Bangladesh declined. Circular weft knitting machine enterprises are continuing to strengthen the research and development of new technologies, based on the subdivision of fields, and taking the road of differentiated competition.

After the silence of last year, the flat knitting machine industry began to recover, and the operation in the first three quarters picked up. On the one hand, the downstream market demand for flat knitting machines has gradually recovered, and some of the existing computerized flat knitting machines in the market are in the cycle of upgrading, especially the two system computerized flat knitting machines with higher cost performance have been put into the market, which has promoted the rapid growth of flat knitting machine sales. On the other hand, full forming technology is gradually improved, more and more enterprises are increasing the promotion of full forming computerized flat knitting machines, and domestic full forming computerized flat knitting machines have been sold in batches. Due to the influence of global economic instability, the export of overseas markets declined significantly, especially Bangladesh, the traditional key country for flat knitting machine export, with a large year-on-year decline.

The performance of each subdivided model in the warp knitting machine industry is different. The double needle bed warp knitting machine benefits from the market cycle. The demand for cashmere home textiles, shoe materials and other products has increased the production and sales of the double needle bed warp knitting machine. Due to the expansion of the application field of warp knitted elastic fabric, the market for the two bar high-speed tricot warp knitting machine has been good for a period of time, but the market demand for the multi bar high-speed tricot warp knitting machine continues to slow down. Lace machine market is limited by market demand, and production and sales have declined. The multi axial warp knitting machine is obviously affected by downstream markets such as wind power materials and infrastructure projects, and has failed to make a major breakthrough.

Printing, dyeing and finishing machinery

In the first three quarters of 2023, the global geopolitical conflicts continue, the external trade environment is more complex and severe, the trade pressure of China's textile industry is escalating, and the production and marketing situation is under greater pressure than the same period last year. The industry is faced with the situation of insufficient consumer confidence of downstream users, weak consumer demand, and insufficient demand in domestic and foreign markets. The sales of most product categories in China's dyeing and finishing machinery industry show a downward trend. With the arrival of the traditional sales peak season in autumn and winter, the market situation in the third quarter was slightly improved compared with the second quarter due to seasonal demand, but it was still not optimistic compared with last year. On the whole, the dyeing and finishing machinery industry in China continued to operate under pressure in the first three quarters. From January to September, the pressure on the international market increased significantly compared with previous years, and China's imports and exports showed a downward trend for three consecutive quarters.

On the whole, in the first three quarters of this year, industry enterprises faced challenges such as weak domestic and international market demand, increased international market risk, and increased enterprise operating pressure. In terms of export, China's market to Vietnam and Russia is still growing against the trend, and industrial enterprises should pay full attention to it. According to the questionnaire survey results of China Textile Machinery Association, enterprises generally faced problems such as insufficient orders, increased production costs and bad market competition in the first three quarters. The evaluation of the overall operation of the industry in the first three quarters and the market forecast in the fourth quarter were both average.

Chemical fiber machinery

It can be seen from the statistical data that in the first three quarters of 2023, the production and operation of chemical fiber machinery industry enterprises will face greater pressure, and the polyester filament market will decline significantly compared with the same period last year. Due to the increasing international situation and capital pressure, the market is reaching a low point again. At present, the newly increased filament capacity is basically the capacity formed by the equipment start-up signed last year. The filament equipment is mainly sold by leading enterprises to purchase imported equipment, and some domestic equipment is purchased under a small number of contracts, all of which are the part of the existing industrial chain that needs to be expanded for normal development. On the one hand, production reduction and line stoppage are common in some small enterprises; On the other hand, the downstream chemical fiber market demand has weakened, leading to the loss of enterprise production, which is expected to grow slowly in the fourth quarter.

Compared with the same period last year, the market sales of texturing machines showed a significant downward trend. The production and supply of enterprises are extremely difficult. Due to the low operating rate of user enterprises, there are delays in picking up goods and reduction of original orders. At present, the start-up rate of the downstream is on the downward trend, and the form of texturing machine in the fourth quarter is not optimistic.

Nonwoven machinery

In the current macro economic downturn environment, the spinning melting and spunlaced nonwoven production lines closely related to the production of epidemic prevention materials are facing a severe market situation. The massive release of production capacity, the market digestion still takes time, and the real estate market fluctuations restrain the demand for geotechnical and waterproof material production lines, making the situation of relevant equipment enterprises more serious. This is an external environment that has not been seen for many years. Many enterprises are actively responding to it and trying to get rid of the current operating difficulties. In order to adapt to international circular economy norms, enterprises focus on technological innovation and product upgrading, and strive to achieve integrated development with intelligent manufacturing. At the same time, creating original technologies and differentiated products to meet the market demand for high-quality and diversified products has become the common choice of enterprises. There are also enterprises that strengthen collaboration with downstream users and actively explore new application fields to expand business boundaries. This includes looking for emerging markets and application areas to meet diverse needs. While adapting to the changing market, enterprises also tend to establish a more stable business model to better cope with the uncertainty of the external environment. Through the innovation and diversification strategy, to achieve the sustainable development of enterprises and create new market opportunities, the industry may have a new round of reshuffle and restructuring in the future.

(Source: China Textile Machinery Association)