The textile and apparel industry slows down or becomes a foregone conclusion throughout the year

From January to August this year, the United States imported textiles and clothing from China, which accounted for 40% of its total imports. This share was far higher than those in Vietnam and India, which ranked second and third respectively. The market share of the latter two was only 7 % and 5%. China's textile and apparel exports also account for 36% and 70% of the EU and Japanese import markets. This shows that the "Made in China" industrial advantage is still in place.

Since the beginning of this year, the financial crisis and the European debt crisis have continued to ferment, the economic recovery in the US and Europe has been sluggish, and the growth of emerging economies has slowed down; together with the slowdown in domestic economic growth, the growth of major economic indicators such as production, investment, exports, and benefits in China's textile industry has increased. Have fallen back. “Inside the world”, high inventory, high cotton prices, and high labor costs have become hot words for this year's textile industry.

The reporter learned that although the trend of the slowdown in the growth rate of the textile industry may be difficult to reverse throughout the year, the decline in some key parameters has narrowed quarter by quarter. At present, the industry as a whole has begun to show signs of stabilizing.

A high production growth slows investment growth slowdown

According to statistics from the National Bureau of Statistics, from January to August this year, the total value of industrial output of 37,000 textile enterprises above designated size reached 3,639.43 billion yuan, a year-on-year increase of 10.8 percent, and the growth rate was 18.6 percentage points lower than the same period of last year, respectively. In the first and second quarters, it fell 3.9 and 0.5 percentage points. During the same period, the value-added of the textile industry increased by 12.8% year-on-year, 4.5% higher than that of the same period of last year, and fell by 2.3 and 0.2% respectively compared with the first and second quarter of this year.

With the exception of yarns, the output growth of the major categories of products showed declines at different levels. In the first eight months of this year, the output of chemical textiles, fabrics, printing and dyeing cloths and garments of the textile enterprises above the designated size increased by 11.9%, 10.3%, 1.3%, and 7.4% year-on-year, respectively, down 4.4, 3.4, 9.4, and 3 percentage points from the same period last year. Compared with the first quarter of this year, it dropped by 1.5, 6, 8.5 and 0.5 percentage points respectively, which was 2.6, 1.4, 3.4 and 0.3 percentage points lower than the second quarter of this year. Yarn production increased 13.5% year-on-year, 2 percentage points higher than the same period of last year, which was 0.4 and 0.3 percentage points higher than the first and second quarter of this year.

According to a follow-up survey conducted by the China Cotton Textile Industry Association, from January to August this year, the output of cotton yarns of 124 key enterprises in the country fell by approximately 2% year-on-year, and cloth production decreased by 1.3%. China Chemical Fiber Industry Association's survey results show that since September, due to the still low demand in the downstream, the price of polyester products has shown a downward trend. The inventory of finished products of enterprises has increased from 10 days in July and August to about 15 days, and the inventory pressure has increased significantly.

Affected by the slowdown in the growth rate of the textile economy, corporate investment confidence has declined, investment growth has slowed down, and new projects have decreased. According to the data from the National Bureau of Statistics, from January to August this year, the textile industry completed a total of 483.589 billion yuan in fixed assets investment in projects with a total value of over 5 million yuan, a year-on-year increase of 16.21%, a decrease of 19.55 percentage points from the same period of last year, compared to the first quarter of this year. The decrease was 0.79 percentage points, which was an increase of 1 percentage point from the second quarter. The number of new projects started was 9145, a year-on-year decrease of 6.99%, a decrease of 5.71 percentage points from the same period of last year, a decrease of 0.34 percentage points from the first quarter of this year and an increase of 3.1 percentage points from the second quarter.

Although the growth of investment in the industry has slowed down, new investment in the central and western regions has maintained a relatively rapid growth. In the first eight months, the amount of investment in the textile industry in the central region increased 19.55% year-on-year, the proportion of investment in the country reached 31.94%, an increase of 0.79 percentage points over the same period of last year; the textile investment in the western region increased by 18.22% year-on-year, in the total textile investment in the country. Accounted for 8.04%, an increase of 0.14 percentage points over the same period last year.

B exports from negative to positive domestic growth deceleration

As of the third quarter, China's textile and apparel exports have finally reversed the previous negative growth trend and realized a negative turn.

The latest statistics from the State General Administration of Customs show that from January to September of this year, China’s total exports of textiles and clothing were US$187.114 billion, an increase of 0.54% year-on-year, and the growth rate increased by 1.24 percentage points from -0.7% in January-August, reversing the previous consecutive Two months of decline. Among them, textile exports amounted to 71.53 billion U.S. dollars, an increase of 0.2% year-on-year, an acceleration of 0.9 percentage points from January to August; exports of apparel and accessories amounted to 116.061 billion U.S. dollars, a year-on-year increase of 0.7%, and an acceleration of 1.4 percentage points from January to August, both of which reversed The first eight months decreased by 0.7% year-on-year.

From the month-on-month comparison, textiles and apparel exports in September amounted to 25.126 billion U.S. dollars, an increase of 526 million U.S. dollars from the previous month, an increase of 2.14 percent, and a new monthly high since the beginning of this year after August. Among them, textiles exported 8.541 billion U.S. dollars, an increase of 6.21% over the previous month, and exports of apparel and accessories were 16.584 billion U.S. dollars, an increase of 0.16% from the previous quarter.

Many textile and apparel export companies stated that the current rebound in exports mainly benefited from the increased demand for companies to make up inventories, but with the end of this round of restocking, the pressure on textile and garment exports will remain high in the future.

The industry generally believes that the decline in foreign demand led to the lack of corporate orders is an important reason for the shrinking of the scale of China's textile and apparel exports. Throughout the world, the growth in textile and apparel demand in the United States, Japan, and the European Union is declining. According to relevant statistics, in the first half of this year, the EU’s total imports of textiles and clothing decreased by 6.9% year-on-year, while the total amount of US textile and apparel imports grew nearly to zero. Japan’s textile and apparel imports increased by only 2.2% year-on-year, down 10.8% from the same period last year.

In addition, the “scissors gap” in cotton prices at home and abroad is also the main reason that weakens the competitiveness of the textile industry, especially the cotton spinning industry, and reduces the profitability of textile companies. According to reports, the current price difference between domestic and foreign cotton has exceeded 5,000 yuan / ton, such a huge difference is difficult for textile companies to completely digest.

The external demand market continues to be sluggish, and it is difficult for the domestic market to have a hot scene. Affected by the slowdown of domestic macroeconomic growth and the increase in prices of raw materials, which have pushed up the prices of textile and apparel products, the growth rate of domestic consumption of textile and apparel in China has declined. From January to August this year, the retail sales of clothing, shoes, hats, and needles above designated size nationwide increased by 17.5% year-on-year, which was 6.5 percentage points lower than the same period of the previous year; after deducting price factors, the actual growth rate was 13.63%, which was lower than the 6.87 percentage points in the same period of last year. . In the same period, the domestic output value of textile enterprises above designated size was 2,980,711 million yuan, a year-on-year increase of 12.38%, a decrease of 20.14 percentage points from the same period of last year and a decrease of 3.9 percentage points from the first quarter of this year.

C net profit loss losses doubled

As the unfavorable factors such as the widening of the gap between domestic and foreign cotton prices and the continuous increase in production costs have been intertwined, the pressure on enterprises has increased sharply, and the benefits of the textile industry have dropped significantly compared with the same period of last year. From January to July this year, the total profit of the textile enterprises above the designated size was RMB 135.8 billion, a year-on-year decrease of 1.08%, which was a decrease of 47.93 percentage points from the same period of the previous year. The sales margin was 4.45%, a year-on-year decrease of 1.16 percentage points. The loss of textile enterprises was 17.68%, and the loss of loss-making enterprises increased by 110% year-on-year. It is worth noting that since the beginning of this year, the productivity of the textile industry has continued to increase. From January to July, the labor productivity of enterprises above designated size has increased by 13.18% year-on-year, which has provided strong support for resolving various risks.

From the perspective of various sub-sectors, cotton spinning and chemical fiber industries are most affected by fluctuations in raw material prices. Profits have shown negative growth, with chemical fiber being the most obvious. Relevant statistics show that the profits of the chemical fiber industry fell by 52.54% from January to July, and the profits of 124 key cotton spinning companies from January to August decreased by 30% year-on-year.

The results of the survey conducted by China Textile Industry for 500 textile and garment companies also showed that 51.7% of the enterprises felt that their profits had decreased, and only 4% of the companies believed that profits had risen. From the perspective of the industry, chemical fiber and cotton spinning companies have made profits. The perception of decline is more pronounced.

In addition to the lack of external demand, the constant high labor costs and financing costs are undoubtedly the main factors that have reduced the profitability of China's textile companies. According to statistics, the average wage of the textile industry in the first half of this year increased by approximately 15% year-on-year. At the same time, the financing problem of financing difficulties for textile companies has not yet been completely resolved, and the cost of financing remains high. From January to July, interest expenditure on textile enterprises above designated size increased by 28.5% year-on-year, which was higher than the growth of main business income by 19.1 percentage points over the same period.

D clothing industry "high inventory" pressure top

As the external demand market is sluggish, the growth in the domestic market has slowed down, and in the absence of smooth sales channels at home and abroad, garment companies have also encountered a “high inventory” problem similar to that of iron and steel companies.

In June of this year, the IPO application of Haishu Home, a well-known apparel retailer, was vetoed by the Securities Regulatory Commission, and the industry was at a loss. According to reports, excessively high inventory and low inventory turnover are the main reasons for the rejection of Hailan's home. According to statistics, as of August 29, the mid-year report of listed companies in textile and clothing shows that the total inventory of 80 textile and apparel companies in the first half of the year was as high as RMB 67.1 billion. Among them, the stocks of 11 companies, including Youngor, Red Bean Co., Jihua Group, Smith Barney, and Semba Clothing, all exceeded 1 billion yuan.

As early as the first half of this year, many apparel companies have felt the enormous pressure of high inventory. According to statistics, the amount of inventory held by half of China's 35 home textile listed companies exceeded 46.4 billion yuan, an increase of 3.7 billion yuan over the same period of last year. Not only that, the backlog of inventories of these 35 listed companies also exceeded RMB 14.1 billion, an increase of RMB 5.72 billion from the same period of last year, which represents a year-on-year increase of 40%.

This reporter learned that, compared with the normal level in previous years, this year's apparel companies' inventory pressure is generally several times higher. There are clothing company executives even ridiculed that their hard work in exchange for half a year is a mountain of fixed products.

According to Wang Qiang, chief editor of the First Textile Network, high inventory mainly affects the turnover of the company's capital. The higher the inventory, the more capital is deposited, the more difficult the company's cash flow is, and the difficulty in capital turnover will affect the normal production and business activities of the company. According to statistics, in the third quarter of this year, China's apparel industry spent more than 65.5 billion yuan in finished goods, a year-on-year increase of 15.7%, while the second quarter's share of finished goods increased by 17.3%.

E year-round deceleration trend is difficult to change

China Textile Association expects that although the main economic indicators of the textile industry have already shown signs of a narrowing decline, due to unabated internal and external pressures, various uncertain factors are intertwined, and it is expected that the deceleration of the textile economy during the year will be difficult to significantly reverse.

On the export side, due to the continued deterioration of the European debt crisis, there are still high risks in the current international market recovery. In October, the latest forecast of the International Monetary Union organization reduced the global economic growth rate by 0.2 percentage points to 3.3% for the whole year, indicating that the outlook for global economic recovery is not optimistic. From a year-round perspective, the collective downturn in the international market has caused China's textile and apparel exports to lack a stable and positive momentum, and the export situation remains very severe.

As far as the domestic market is concerned, as the effect of deregulation of domestic monetary policy and the fall in commodity prices gradually appear in the second half of the year, the growth rate of domestic demand for textiles and garments is expected to increase gradually, and its pulling effect on the textile industry will also be stronger than in the first half of the year. However, taking into account that there are still many unfavorable factors affecting the stable operation of China's economy, it is expected that the annual domestic macroeconomic growth will slow down compared with last year, and the market confidence will be difficult to significantly increase, and the overall growth rate of domestic textile and apparel sales will also be significantly lower. Last year.

Based on various favorable and unfavorable factors, China Textile Association anticipates that under the support of the domestic demand market, the key indicators for the production and sales of the textile industry will continue to grow. However, the demand in the international market is unlikely to improve significantly, the domestic production cost will continue to rise, and the market competition will become increasingly fierce. Under the circumstances, the pressure on textile exports remained prominent, which in turn led to further declines in the growth rate of the industry's production and sales. However, with the recovery of domestic demand growth and the decline in the statistical base of the same period of last year, it is expected that the decline in the growth rate of production and sales across the industry is expected to further reduce.

Related reports "China-made" industry advantage is still

Although faced with many difficulties and challenges, the "****" has not arrived yet. As a consumer industry, textile and apparel industry will not change its overall trend of demand growth, and its potential for future development remains promising.

Xia Lingmin, vice president of the China National Textile and Apparel Council, said that as the cost of production factors keeps rising, although some orders for textiles and garments will be transferred to some neighboring countries, this shift is not large-scale, nor is it completely transferred. In fact, China’s textile industry The industrial advantage of the industry is still evident. For example, in 2011, China’s total fiber processing volume exceeded 43 million tons, which is more than half of the total fiber processing in the world. China’s textile and apparel exports reached US$254.1 billion, accounting for more than 36% of global apparel exports.

In addition, a sound industrial chain and high-quality workforce are also important weapons for the preemptive use of China's textile industry in fierce international competition.

It is worth mentioning that although the scale of exports has been reduced slightly since the beginning of this year, the dominant position of China's textile and apparel products in major importing countries and regions has not changed. For example, from January to August this year, the United States imported textiles and clothing from China, which accounted for 40% of its total import volume. This share was far higher than the second and third largest Vietnam and India, and the latter two markets. The share is only 7% and 5% respectively. Not only in the United States, China's textile and apparel exports also accounted for 36% and 70% of the EU and Japan's import market.

For the majority of textile and garment enterprises, expanding product coverage, strengthening brand marketing, and increasing technological transformation can all be important choices for future development strategies. Taking cotton spinning companies as an example, in addition to developing new products and increasing the added value of products, it is also a good choice to adjust the product structure and reduce the use of cotton.