Since 2020, in the face of the COVID-19 epidemic, my country’s textile industry has steadily promoted the resumption of work and production, and production and supply capacity and industrial chain operation coordination have returned to normal. Entering the second quarter, driven by the substantial increase in sales of anti-epidemic materials and the slow recovery of the domestic demand market, the economic operation of the textile industry rebounded under pressure. Although the main operating indicators from January to May were still in the negative growth range, the decline continued to narrow.
The decline in production continues to narrow, and the industrial textiles industry speeds up significantly
With the steady advancement of normalized epidemic prevention and control, the production of the textile industry has gradually resumed, and the decline has continued to narrow. According to data from the National Bureau of Statistics, from January to May, the industrial added value of the national textile industry above designated size decreased by 8.2% year-on-year, and the growth rate was 11.8 percentage points lower than the same period last year, but it rebounded by 3.1 percentage points from January to April this year. The growth rate turned negative to positive for the first time. Among all links in the industrial chain, the industrial textiles industry maintains a high-speed lead. The industrial added value from January to May increased significantly by 50.7% year-on-year, which was 58.9 percentage points higher than the growth rate of the entire industry. Affected by shrinking terminal demand, the apparel and home textile industries saw industrial added value decrease by 12.8% and 10.6% respectively year-on-year. The industrial added value of the textile machinery industry decreased by 20.8% year-on-year from January to May, reflecting that industry investment confidence remains sluggish.
Among the major categories of products, only the output of non-woven fabrics achieved a positive growth of 2.5% year-on-year, while the output of other products declined. From January to May, the output of chemical fiber, yarn, cloth and clothing of enterprises above designated size decreased by 3.2%, 18.1%, 27.6% and 17.9% respectively year-on-year, and the growth rate was 16.2, 19.7, 27.4 and 17.5 percentage points lower than the same period last year respectively.
Figure 1: Growth rate of added value of textile industry sub-sectors from January to May 2020
Data source: National Bureau of Statistics
The domestic demand market has recovered moderately, but the export situation remains grim
Entering the second quarter, China’s epidemic prevention and control situation continues to improve, residents’ consumption activities have increased, and domestic demand for textiles and clothing has recovered moderately. According to data from the National Bureau of Statistics, from January to May, the retail sales of clothing, shoes, hats, and knitted textiles in units above designated size nationwide fell by 23.5% year-on-year, a decline that was 5.5 percentage points higher than that from January to April this year. Online consumption continues to improve, and the national online retail sales of clothing products decreased by 6.8% year-on-year, and the decline narrowed by 5.2 percentage points from January to April.
The export scale of masks and other anti-epidemic materials has increased significantly, supporting the gradual narrowing of the decline in exports of the textile industry. According to Chinese customs data, from January to May, my country’s textile and apparel exports amounted to US$100.62 billion, a year-on-year decrease of 2.3%, and the decline narrowed by 8.2 percentage points compared with the previous four months. Among them, masks drove textile exports to expand to US$60.36 billion, a significant increase of 18.5% year-on-year; the decline in clothing exports continued to show an expanding trend, with exports from January to May decreasing by 22.7% year-on-year, indicating that international terminal market demand is still sluggish. The export market of the textile industry has become differentiated. From January to May, the value of my country’s textile and clothing exports to the United States and countries along the “Belt and Road” decreased by 1.5% and 15% year-on-year respectively, while the value of China’s textile and clothing exports to Japan and the EU increased by 18.8% and 38% year-on-year respectively. .
Figure 2: Cumulative year-on-year growth rate of textile and apparel domestic sales indicators
Data Source: National Bureau of Statistics
Enterprise operating pressure is prominent, and the industrial industry is in good profitability
According to data from the National Bureau of Statistics, from January to May, the country’s 33,000 textile enterprises above designated size achieved operating income of 1,552.11 billion yuan, a year-on-year decrease of 17.2%; total profits were 54.6 billion yuan, a year-on-year decrease of 24.5%; operating income The profit margin was 3.5%, 0.4 percentage points lower than the same period last year. The profits of more than 80% of the links in the industrial chain fell by more than 10%, and the profits of more than half of the links still fell by more than 30%. Driven by anti-epidemic materials, the profitability of the industrial textiles industry has increased significantly. Total profits from January to May increased by 189.1% year-on-year, and the operating income profit margin reached 12.2%.
The operation quality of textile enterprises has declined. From January to May, the loss ratio of textile enterprises above designated size reached 32%; the total asset turnover rate and finished product turnover rate were only 0.9 times/year and 10.4 times/year respectively, which were 20.6% and 24.7% slower than the same period last year; the ratio of three expenses It was 7.3%, 0.3 percentage points higher than the same period last year.
Figure 3: Benefit indicators of textile enterprises above designated size from January to May 2020
Data source: National Bureau of Statistics
The scale of investment has declined significantly, and development confidence is still insufficient
According to data from the National Bureau of Statistics, from January to May 2020, the completion of fixed asset investment in the textile industry decreased by 30.5% year-on-year, and the growth rate slowed down significantly by 30.9 percentage points compared with the same period last year. The investment scale of the entire industry chain has shown a downward trend, with investment in the textile industry, chemical fiber industry and clothing industry decreasing by 26.2%, 23.2% and 39.2% respectively year-on-year from January to May.
Figure 4: Growth rate of fixed asset investment in the textile industry
Data Source: National Bureau of Statistics
Looking forward to the whole year, the domestic and international development environment faced by my country’s textile industry remains complex.The situation is severe, and risk and challenge factors have increased significantly. The COVID-19 epidemic has caused the global economy to fall into recession. Insufficient international market demand will remain the norm in the second half of the year, and the export situation of the textile industry remains severe. However, the domestic epidemic prevention and control situation is gradually improving, residents’ living and production order has accelerated, and the national “six stability” and “six guarantees” policies have helped residents maintain employment and income. The continuous accumulation of various positive factors will provide more opportunities for the textile industry. It provides favorable conditions for supporting domestic demand and provides important guarantee for enterprises to resolve various risks and challenges. </p
