Since the outbreak of the COVID-19 epidemic and its continued spread, global textile production and order volume have continued to decline, and retail sales have plummeted, which may continue to be a long-term downturn. The sharp weakening of clothing consumption demand in the international market has directly led to the product structure of my country’s textile and clothing exports. Although some European countries have gradually relaxed their control policies and the global supply chain is showing signs of recovery, overall, the negative impact on the industrial chain is unavoidable.
Manpower and orders, the difficulties and recovery of the textile industry in the first half of the year
A research report from Great Wall Securities shows that as of June 24, this year’s textile and apparel industry index (Shenwan) fell 5.96%, and the Shanghai Composite Index fell 2.31% during the same period. Ranked 21st among the 28 Shenwan first-level industries. Among the sub-sectors, women’s clothing and casual clothing have experienced larger cumulative declines.
Such a performance is commensurate with the “cold winter” experienced by the textile and apparel industry in the first half of the year. However, if broken down, the “coldness” of the textile and apparel industry was not the same in the first and second quarters of the first half of this year. In the first quarter, affected by the difficulty in resuming work and production and the impact of overseas epidemics, the textile and apparel industry was relatively cold. “Freezing” but has started to ease in the second quarter.
Chen Huan, the boss of Guangzhou Canping Trading Co., Ltd., told reporters that the company resumed work in early March and was working more normally than before. The resumption date was about a month and a half late. But even when work resumed, not all employees were present.
“Our factory is not big, with only more than ten people. Due to the epidemic, many workers’ children do not go to school, so we Many people in the factory were still taking care of their children at home, and some simply stopped coming this year,” he said.
Due to the reduction in employees, he recruited some workers through video, but there will still be some problems, that is, after the workers arrive , not familiar with the factory’s production rhythm, many people left their jobs quickly, so they had to keep recruiting new ones.
Lin Leling, chairman of Shaoxing Bukuong Needle Textile Co., Ltd. and Shaoxing Yuchao Knitting Technology Co., Ltd., told reporters that they The company resumed work on February 28, but the epidemic caused a delay of half a month. “There are about 100 people in the company. There were cases where they could not come before, but now they can come normally.”
However, manpower The problem has been solved, small and medium-sized textile companies still face another problem: orders.
Chen Huan said that he has received many customers through short videos, and orders are placed basically every day. However, he found that when the orders were distributed to different employees, there was an “unequal hot and cold situation”.
“In the past, basically any kind of employee was fine, but what we want now are those skilled workers. This way In other words, our costs are actually reduced during the production process. Because the skills of workers have improved, we can also receive more orders. In fact, there are still orders, but they will be concentrated in the hands of some people with higher skills. Up.” He said.
Lin Leling said that the epidemic had some impact on textile and clothing, but it had a greater impact on their company in the early stage. At present, the company Production is already normal, but the output is reduced by 50% compared to previous years. “Nowadays, the number of front-line employees in enterprises is increasing.”
Data from the China Bureau of Statistics show that from January to May this year, the number of people nationwide Industrial enterprises above designated size achieved a total profit of 1.84349 billion yuan, a year-on-year decrease of 19.3%, and the decline was 8.1 percentage points narrower than that from January to April. Among them, among the 41 major industrial industries, the total profits of 10 industries increased year-on-year, 1 industry remained the same, and 30 industries decreased. The textile industry fell by 10.3%, and the textile and clothing and clothing industry fell by 29.2%. The declines were not small.
However, compared with the situation from January to April, it has improved significantly: the total profit of the textile industry fell from January to April 19.8%, and the textile, clothing, and apparel industry dropped by 34.8%.
With the traditional off-season and financial pressure, the industry situation in July is still worrying
However, halfway through 2020, entering July, the textile industry has once again entered the traditional off-season. Whether it is domestic demand or foreign trade, the pressure on the textile industry chain has doubled, and small and medium-sized enterprises may continue to be under pressure.
1. Domestic demand: Prelude to the off-season, companies are under pressure
From the perspective of consumption habits and downstream replenishment timing, July and August will enter the off-season, and orders will be in a state of sluggishness. Industry experts said that from June to September, some small and medium-sized enterprises may face pressure to reduce production, shut down, take holidays or even close down.
2. Foreign trade: Prelude to holiday, few orders
The European Union generally takes a high temperature holiday from July to September, and France, Italy, the Netherlands and other countries have to take a holiday for at least a month. Therefore, the export orders in the market are relatively small in July and will not be until August or September. increase again. Therefore, the downstream market in July is generally not optimistic, and the market will not pick up until August at any time.
3. Production status: weak market, insufficient openings
According to the investigation and understanding of the production situation of weaving enterprises in textile clusters, the cluster weaving market has shown a weakening trend since June. As of the end of June, cluster weaving enterprisesThe average operating rate is around 50%, and the weaving capacity utilization rate is below 40%.
Most clusters stated that business operations in June were no better than in May. Due to the combined effects of the epidemic and the arrival of the traditional off-season, market demand was weak. Product inventories continue to increase. Problems such as lack of corporate orders and high financial pressure still exist. Enterprises adjust production, reduce operating costs, and maintain operations.
4. As the off-season approaches, shipments are limited, so production must be reduced to protect prices
From the current point of view, the textile peak season in the first half of the year has basically passed. In July, there may only be sporadic transactions due to the mentality of stocking up. The upward pressure on prices is greater. There is currently no significant improvement on the demand side. Foreign orders Still facing the risk of recurrence of the epidemic, shipments are relatively limited. Therefore, it is expected that in the off-season market from July to August, if downstream demand does not improve significantly, companies may adopt a strategy of reducing production to protect prices in the future.
Most textile people are still mentally prepared for the market situation in July. After all, according to historical conditions, if there is a big market in the textile market, it usually occurs in March-April and September-October. There is generally less big market in July-August, that is, in the off-season, the market will originally have to face The pressure of accumulated inventory is just that the inventory pressure this year is too huge, and may not be encountered in the past six years.
Therefore, textile people need to recognize their own position in troubled times and consciously limit inventory instead of blindly producing , turn all funds into inventory to avoid falling into a difficult situation under competitive pressure. </p