In The First Half Of 2020, The Domestic Textile Demand Market Will Pick Up Under Pressure, And The Industrial Industry Will Speed Up Sharply

Since 2020, in the face of the new coronavirus epidemic, China's textile industry has steadily promoted the resumption of work and production, and the production supply capacity and industrial chain operation coordination have returned to normal. In the second quarter, driven by the substantial increase in the production and sales of epidemic prevention materials and the slow recovery of 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 rate continued to narrow.

The decline of production continued to narrow, and the industrial textiles industry increased significantly

With the steady progress of the normalization of epidemic prevention and control, the textile industry production gradually recovered, and the decline rate continued to narrow. According to the data of the National Bureau of statistics, from January to may, the industrial added value of the textile industry above Designated Size in China decreased by 8.2% year-on-year, and the growth rate was lower than that of the previous year The same period of last year was 11.8 percentage points, but increased by 3.1 percentage points compared with January to April this year, and the growth rate in May turned negative for the first time. The growth rate of textile industry in the whole industry was 58-5% higher than that in the whole industry, with a significant growth rate of 58.5% in the whole industry chain.

Affected by the shrinking terminal demand, the added value of clothing and home textile industry decreased by 12.8% and 10.6% respectively. From January to may, the industrial added value of textile machinery industry decreased by 20.8% year-on-year, reflecting that the industry's investment confidence is still declining.

Among the major categories of products, only the output of non-woven fabrics increased by 2.5% year-on-year, while the output of other products decreased. From January to may, the output of chemical fiber, yarn, cloth and clothing of Enterprises above the designated scale decreased by 3.2%, 18.1%, 27.6% and 17.9% respectively year-on-year, and the growth rates were 16.2%, 19.7%, 27.4% and 17.5 percentage points lower than that of the same period of last year.

Figure 1: growth rate of added value of textile industry by industry from January to may in 2020

Source: National Bureau of statistics

The domestic demand market recovered moderately, and the export situation remained grim

In the second quarter, China's epidemic prevention and control situation continued to improve, consumer activities increased, and domestic demand for textiles and clothing recovered moderately. According to the data of the National Bureau of statistics, from January to may, the retail sales of clothing, footwear, knitwear and textiles of units above the national quota decreased by 23.5% year-on-year, up by 5.5% compared with January to April this year. Online consumption continued to improve, and the retail sales of online wear goods decreased by 6.8% year-on-year, 5.2% lower than that in January to April.

The export scale of anti epidemic materials such as masks has increased significantly, and the export decline rate of supporting textile industry has gradually narrowed. According to the data of China Customs, from January to may, China's textile and clothing exports amounted to US $100.62 billion, a year-on-year decrease of 2.3%, and a decrease of 8.2 percentage points compared with the previous four months. Among them, the export volume of textiles driven by masks expanded to US $60.36 billion, a significant increase of 18.5% year-on-year; the decline of clothing export continued to show an expanding trend, and the export volume from January to may decreased by 22.7% year-on-year, indicating that the international terminal market demand is still low. Compared with the same period of last year, the export value of textile and clothing industry along the belt and road decreased by 1.5% and 1.5% respectively.

Year on year growth index of textile and garment sales

Source: National Bureau of statistics

The pressure of enterprise operation is outstanding, and the profit situation of industrial industry is good

According to the data of the National Bureau of statistics, from January to may, 33000 Textile Enterprises above Designated Size realized 1552.11 billion yuan of business income, a year-on-year decrease of 17.2%, a total profit of 54.6 billion yuan, a year-on-year decrease of 24.5%, and a profit margin of 3.5%, 0.4 percentage points lower than that of the same period of last year. More than 80% of the industrial chain's profits dropped by more than 10%, and the profit of more than half of the links still dropped by more than 30%. Driven by epidemic prevention materials, the profit level of industrial textiles industry has been greatly improved. The total profit from January to May increased by 189.1% year on year, and the profit margin of operating income reached 12.2%.

The running quality of textile enterprises has declined. In the same period of last year, the turnover rate of textile enterprises slowed down by more than 20.3% in the same period of last year, and the turnover rate of textile enterprises decreased by more than 20.3% in the same period of last year, and the turnover rate of finished products was only 10.3% and 24.0% respectively, higher than that of the same period of last year.

Figure 3: benefit index of textile enterprises above Designated Size from January to may in 2020

Source: National Bureau of statistics

The scale of investment has declined significantly, and the development confidence is still insufficient

According to the data of the National Bureau of statistics, from January to may 2020, the completion of fixed assets investment in the textile industry will decrease by 30.5% year-on-year, and the growth rate will significantly slow down by 30.9% compared with the same period of last year. The investment scale of the whole industry chain is declining. The investment amount of textile industry, chemical fiber industry and clothing industry decreased by 26.2%, 23.2% and 39.2% respectively from January to May.

Figure 4: growth rate of fixed assets investment in textile industry

Source: National Bureau of statistics

Looking forward to the whole year, the domestic and foreign development environment faced by China's textile industry is still complex and severe, and the risk and challenge factors are significantly increased. The global economy has fallen into recession due to the outbreak of new crown pneumonia. The shortage of international market demand is still normal in the second half of the year, and the export situation of textile industry is still grim. However, the situation of epidemic prevention and control in China is gradually improving, the living and production order of residents is recovering rapidly. The national "six stabilities" and "six guarantees" policies are helpful to ensure the employment and income of residents. The continuous accumulation of various positive factors will provide more favorable domestic demand support conditions for the textile industry, and provide an important guarantee for enterprises to resolve various risks and challenges.