Since 2019, China’s textile industry at home and abroad development environment is more severe, the slowdown in market demand and trade environment risks intertwined, challenges and difficult factors significantly increased. The textile industry adheres to deepening the structural reform on the supply side, continues to accelerate the transformation and upgrading, and in the case of increased pressure on production and operation, the resilience to resist the downward risk pressure continues to appear, the business climate remains in the expansion range, and the economic situation is basically in line with the external situation.
Industry business continues to expand, production achieves low growth
Since 2019, the business climate of the textile industry has continued to be in the expansion range. According to the China Textile Industry Federation survey data, the third quarter of the textile industry business climate index of 51.9, continueto in the expansion range of more than 50, slightly lower than the second quarter of 0.1 points.
The start of construction in the textile industry is generally normal, and production has maintained a steady growth at a low rate. According to the National Bureau of Statistics, in the first three quarters of 2019, the capacity utilization rate of the textile industry (including spinning, weaving, dyeing, home textile, industrial use, etc.) was 78%, a decrease of 2.6 percentage points from a year earlier; This was 1.1 percentage points higher than the same period last year, and the utilization rate of the textile and chemical fiber industries was higher than the capacity utilization level of 76.2% of the national industry during the same period. The value added of enterprises above the size of the textile industry increased by 2.9% YoY, the same growth rate as a year earlier and 0.7 percentage points slower than in the first half of this year. In all sectors of the industrial chain, the production growth of chemical fiber and industrial textile industry was more stable, with industrial value added increasing by 12.3% and 7.4% YoY in the first three quarters, respectively, higher than the industry-wide value-added growth rate of 9.4 and 4.5 percentage points, respectively.
Internal and external market pressure, online retail channel growth is good
Since 2019, China’s textile and clothing domestic sales market growth has slowed steadily, online retail continued to maintain double-digit growth. According to the National Bureau of Statistics, in the first three quarters, retail sales of clothing shoes, hats and needles and textiles above the national limit increased by 3.3% YoY, a slowdown of 5.6 percentage points from a year earlier, but 0.3 percentage points faster than in the first half of this year, showing a sustained and modest rebound. National online clothing retail sales increased 18.6% year-on-year, slowing by 4.7 and 2.8 percentage points respectively from the same period last year and in the first half of this year.
Export pressures in the textile industry continue to increase. In the first three quarters, China’s total textile and clothing exports amounted to US$208.62 billion, down 2.3% YoY, and the growth rate slowed by 7 and 0.3 percentage points, respectively, compared with the same period last year and the first half of this year. Among them, textile exports amounted to US$94.3 billion, up 0.4% YoY, while clothing exports amounted to US$114.31 billion, a decrease of 4.5% YoY. Trade friction between China and the United States has not yet had a global impact on the operation of the entire industry, but the impact of the U.S. tariff measures on exports has gradually emerged, in the first three quarters, China’s exports of U.S. textiles and clothing fell 3.3% Year-on-Year; China’s textile industry’s exports to the United States fell by 18.8% in the month.
Increased pressure on efficiency growth and reduced investment scale
Since 2019, the textile industry’s profit pressure has increased, but the industry chain part of the benefits are good. In the first three quarters, 34,000 textile enterprises above the size of the country realized operating income of 371.526 billion yuan, up 1.5% YoY, a slowdown of 2.7 percentage points from the same period last year; Growth was 14.7 percentage points lower than a year earlier, while operating income margin was 4.2%, down 0.4 percentage points from a year earlier. In each sub-industry, the total profits of the filament, printing and dyeing and knitting industries increased by 7.9%, 4.7% and 3.7% YoY, respectively, higher than the industry-wide growth rate of 15.5, 12.3 and 11.3 percentage points, while the profit margins of the garment, industrial textile and textile industries were stable at a high level, 5.2% and 5.0%, respectively. and 6.8%, about the same as a year earlier.
The scale of fixed asset investment in the textile industry has been reduced, and the regional layout has been continuously adjusted. In the first three quarters, the completion of fixed asset investment in the industry decreased by 7% YoY, with growth rates lower than the 12.8 and 5.7 percentage points in the same period last year and the first half of this year, respectively. By sector, investment in the textile, clothing and chemical fiber industries decreased by 8.2%, 2% and 15.4%, respectively, year-on-year. By region, Fujian Province in the east of China, Hubei in central China, Hunan Province in the west and Chongqing in the west have shown a good trend of positive growth in investment in the whole industrial chain, which is a regional bright spot in the context of the relatively low investment confidence of the whole industry.
Uncertainty will continue and high-quality development tasks are urgent
In the fourth quarter of 2019 and 2020, the complexity and uncertainty of the development environment of China’s textile industry will continue. The slowdown in global economic growth has become a widely expected expectation, it will take some time for China-Us economic and trade relations to return to stability, and the export situation of the textile industry is generally not optimistic. However, at this stage, the improvement of international market demand and the rise of international trade environment risk has become the influence factor of normalization, and it is an inevitable and urgent development task of the textile industry to continuously improve its development resilience and tap the potential of domestic demand market.