Recently, the National Bureau of Statistics released my country’s economic data for the first half of the year. Some of the data have obviously begun to improve, but the data about our textile and apparel industry is not optimistic. Among them, fabric production in the first half of the year dropped as expected, with a drop of 25.9%; per capita clothing consumption expenditure was 611 yuan, a drop of 16.4%, accounting for 6.3% of per capita consumption expenditure; the textile industry capacity utilization rate was 70.3%, a drop of 16.4%. The fixed asset investment in the textile industry fell by 22.4%…
The bleak state of the textile industry has begun to take shape since the COVID-19 epidemic raged overseas. The lack of overseas markets throughout the first half of the year has left the domestic market with “limited cakes” Competition has become more intense, and various textile data have performed extremely poorly. But there is more to the pessimism than meets the eye, or not just the first half of the year.
Rigid needs are no longer “rigorous”, and the proportion of clothing consumption has decreased
The rise and fall of the textile industry is closely related to terminal clothing consumption. In the first half of the year, the national average expenditure on clothing consumption was 611 yuan, an actual decrease of 16.4%. More importantly, the proportion of clothing consumption in per capita consumption has also declined, falling to 6.3%, compared with 7.07% in the first half of 2019 and 8.5% in the first half of 2018. Although clothing is a necessity, its performance in the terminal consumer market is weak. People’s spending on clothing is decreasing year by year in terms of the proportion of total consumption.
With such poor performance of the apparel terminal, it is not surprising that the upstream textile industry has declined in various ways. Throughout the first half of the year, many textile companies were subject to reduced orders and continued to suspend production, take holidays, and take turns. National fabric production has also fallen sharply, with a decline of 25.9% from January to June, and even a decline of 36% in some months. However, the real market does not buy it. The national inventory of finished textile products has not decreased due to the reduction in production, but has increased by more than 10%, even reaching 17.2% at one time.
The decline in fabric production is obviously not enough to meet the shrinkage of end demand, resulting in textile Industrial finished product inventories are still soaring.
Sluggish fixed asset investment and lack of confidence in the textile industry
The market is always keen. If an industry is in good condition and thriving, it will naturally not lack various funds and asset investments. From this we can also say that industries with large capital investment are in good condition, and vice versa are definitely in poor condition.
Everyone familiar with the textile industry knows that since 2019, the overall textile market has not been as good as in previous years, and the impact of the epidemic this year has been even more serious. In fact, this can also be seen from the fixed asset investment situation in the national textile industry. Since fixed asset investment turned negative year-on-year in June 2019, the entire decline has almost been expanding, especially this year when the decline was close to 40%.
The substantial reduction in fixed asset investment in the textile industry is not only an intuitive feedback on the current and past poor textile market, but will also seriously damage the market’s confidence in the future textile market. After all, without all kinds of investment, the equipment and instruments of the textile industry will face problems such as shrinking in scale and obsolescence, making it more difficult for the entire textile industry to face the changing market in the future.
It is difficult to sell the backlog of inventory, and competition will still be fierce in the future
“The various backlogs of inventory and canceled orders caused by the deserted market conditions in the first half of the year have not yet been digested, and the brutal market competition in the second half of the year has begun.” This is what almost all textile people need to face.
According to a fabric trader, various types of protective fabrics were very popular on the market a while ago. They also made a lot of finished polyester taffeta, and some of the quantities were even made in advance. , that is, doing it without waiting for customer orders and contracts. Such “recklessness” is indeed a last resort because they want to reduce inventory too much and are afraid that customers will not have enough time to place orders and miss out. But the final result was that the fabrics did not meet the requirements and all orders were cancelled. Whether it was done according to the contract or not in advance, it was meaningless.
These coated fabrics are piled up in the warehouse and have little value, and the probability of the same customer ordering this fabric again is almost zero. However, the company cannot lack working capital. In the end, these hundreds of thousands of meters of fabric could only be sold to fabric processors at a price of a few cents per meter.
Compared to traders who deal decisively with stock fabrics, more people in the market are holding customers in mind People are shouting about unwanted orders, looking for buyers, and trying to sell the fabrics at a price that is consistent with the value of the fabrics, but in fact very few people pay attention.
The answers given by the textile market in the first half of the year are obviously very unqualified, and even the market in the second half of the year seems to be surrounded by a more deserted off-season. But through�From the changes in various textile data in the first half of the year, especially the data trends in May and June, it is obvious that the entire market is gradually improving. Once the overseas epidemic situation shows a turning trend in the second half of the year, the textile market may truly emerge from the gloom.
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