In January 2022, the China National Textile and Apparel Industry Federation launched a survey on the current business situation of textile enterprise managers. After sorting and analyzing effective data, the prosperity index of textile enterprises in the fourth quarter of 2021 has increased compared with the third quarter, and the industry is very cautious about its expectations for the first quarter of 2022.
Overall business sentiment rises
It is estimated that the prosperity index of my country’s textile industry in the fourth quarter of 2021 is 62.3, an increase of 3.6 points from the third quarter. This is mainly due to the better control of the domestic epidemic, National Day holidays, “Double Eleven” e-commerce promotions, New Year product sales, etc. With factors driving the continued recovery of the consumer market and the strong resilience and vitality of textile industry companies, my country’s textile industry has recovered steadily in the fourth quarter. This is also consistent with the development trend of the manufacturing purchasing managers index from the National Bureau of Statistics. After exiting the expansion range for two consecutive months in September and October, the manufacturing PMI returned to the expansion range in November and December. The index in December was 50.3%. .
Data source: China National Textile and Apparel Federation Industrial Economics Research Institute
In the fourth quarter of 2021, the profitability of my country’s textile industry increased compared with the third quarter. According to the survey, 46.6% of textile companies said that their profits increased in the fourth quarter compared with the third quarter. This proportion increased by 7.7 percentage points compared with the third quarter survey results; 22.1% of textile companies said that their profits decreased compared with the third quarter. This proportion dropped from the third quarter survey results. 7.1 percentage points.
Increased production activity
According to estimates, the production index of the textile industry in the fourth quarter of 2021 was 69.1, an increase of 6.9 points from the production index in the third quarter, and the overall activity of production has improved.
Data source: China National Textile and Apparel Federation Industrial Economics Research Institute
Affected by the low base and then high base of the added value of the textile industry last year, the growth rate of the added value of the industry this year has shown a trend of high first and then low. According to data from the National Bureau of Statistics, from January to December 2021, the industrial added value of my country’s textile industry increased by 4.4% year-on-year, 1.9 percentage points lower than the growth rate from January to September. But overall, the output of my country’s main textile products still maintains growth at varying rates. According to data from the National Bureau of Statistics, in 2021, chemical fiber increased by 9.1% year-on-year, yarn increased by 8.4% year-on-year, cloth increased by 7.5% year-on-year, and clothing increased by 8.4% year-on-year.
Consumption growth accelerates
According to estimates, the new order index of my country’s textile industry in the fourth quarter of 2021 was 66.8, 5.3 points faster than the third quarter, and market demand is in a growth range. Mainly due to the stable recovery of my country’s economy and the continued recovery of the consumer market; the recovery of international market demand has driven the growth trend of new orders.
Data source: China National Textile and Apparel Federation Industrial Economics Research Institute
Sales in the domestic online and offline consumer markets are good and internal circulation is smooth. According to data from the National Bureau of Statistics, in 2021, my country’s retail sales of clothing, shoes, hats, needles, and textiles were 1,384.2 billion yuan, a year-on-year increase of 12.7%, and online clothing retail sales increased by 8.3% year-on-year.
Orders in the international market increased slightly, and exports hit a historical record. According to estimates, in the fourth quarter of 2021, the international order index of my country’s textile industry was 52.5, and new orders increased slightly compared with the third quarter. According to China Customs data, in 2021, my country’s textile and apparel exports were US$315.47 billion, a year-on-year increase of 8.4%. Among them, textile exports were US$145.20 billion, a year-on-year decrease of 5.6%; clothing exports were US$170.26 billion, a year-on-year increase of 24.0%; exports hit a record high for the same period in history. record.
Raw material prices fall from high levels
According to estimates, the raw material purchase price index of my country’s textile industry in the fourth quarter of 2021 was 77.4, 3.2 percentage points lower than the price index in the previous period. After the price of raw materials continued to run at a high level, the transmission to the downstream textile industry was hindered. In the fourth quarter, prices began to fall without support.
Data source: China National Textile and Apparel Federation Industrial Economics Research Institute
According to market tracking data, driven by demand, raw material market prices will continue to rise in 2021. Especially in early October, there was a wave of rapid upward momentum. However, by late October, due to a series of national control measures and the Federal Reserve’s tightening of easing policies As a result, the price transmission to the downstream was blocked, and the price of textile raw materials began to turn downward. The average domestic cotton price in December remained at 21,970 yuan/ton, a slight increase of 2.4% from the average cotton price in October; the price of polyester staple fiber reached 6,908 yuan/ton, a decrease of 13.3% from October; but the price of viscose staple fiber fell back to 12,626 yuan/ton, down 10.2% from October. Overall, textile raw material prices declined in November and December.
According to the survey, most companies order raw materials as they are used or only order 30 days in advance. To avoid the impact of purchase price fluctuations, companies rarely purchase more than 90 days in advance. According to the survey,Less than 20% of companies purchase raw materials more than 90 days in advance.
Industry investment remains stable
In the fourth quarter of 2021, my country’s textile industry as a whole maintained a relatively stable investment pace. According to the survey, 46.9% of companies said that investment this year will remain stable; 35.0% of companies said investment will increase this year, an increase of 2.1 percentage points from the previous survey data. According to data from the National Bureau of Statistics, in 2021, fixed asset investment in my country’s textile industry, textile and apparel industry, and chemical fiber industry increased by 11.9%, 4.1%, and 31.8% respectively year-on-year. Although overall, the growth rate of fixed asset investment in the textile industry has slowed down this year, the growth rate of fixed asset investment in the chemical fiber industry has exceeded the average growth rate of the manufacturing industry since July, and the annual growth rate has been 18.3 higher than that of the manufacturing industry. percentage points; the growth rate of the textile industry is also constantly approaching the average investment growth level of the manufacturing industry.
In the survey of new fixed asset investment projects, although companies will invest more in upgrading and transforming original production capacity in 2021, 58.1% of companies are upgrading and transforming based on original production capacity, which is currently the main new fixed asset investment project of companies; however, There are still 28.8% of sample companies that have built new production capacity. According to corporate feedback, the main factors affecting corporate investment are the market prospects of the industry and corporate benefits. 72.2% of companies said that market prospects are an important factor affecting their investment, and 65.3% of companies said that corporate efficiency is an important factor affecting their investment.
Be cautious about future development
The surveyed companies made an outlook for the industry in the first quarter of 2022 based on their own production and operation status and feelings about the market. Overall, companies are more cautious in their judgments about future industry prosperity. According to calculations, the textile industry prosperity index is expected to be 51.2 in the first quarter of 2022, 11.1 points lower than the industry prosperity index in the fourth quarter of 2021. Companies believe that the overall operating speed in the first quarter of 2022 will slow down from the fourth quarter. Specifically, it is expected that production may slow down in the first quarter of 2022; new orders may decrease slightly; and raw material prices may continue to fall from high levels.
Data source: China National Textile and Apparel Federation Industrial Economics Research Institute
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