Textile Status of the First Three Quarters in 2009
In the first three quarters of 2009, the textile industry continues to maintain rising trend in general, and this trend is increasingly clear. Although the international market demand remains in the doldrums, the industry is still at the bottom of the export shock, the sector of production and investment continued to rise, profits rebounded significantly, the industry structure adjustment speeded; at the same time, the grim situation of employment has slowed down, the amount of labor in some sub-sectors began to pick up, the guiding principle of the state "maintaining growth, expanding domestic demand, readjusting the structure," had been better implemented, which made great contribution to macro-economic recovery and social stability.
1. Basic Situation of the First Three Quarters
(A) Sales Go up Significantly
From January to August of 2009, more than 52203-scale textile enterprises realized an industrial output value of RMB2.370778 trillion, an increase of 7.50%, compared with last year, down 8.13 percentage points, but compared with January to February, increased 4.87 percentage points; at the same period, sales volume growth was 7.38%, down by 8.62 percentage points, compared with January to February, rose 4.25 percentage points. Production and sales were relatively stable since the beginning of the year, and sales ratio has been maintaining at 97% -98% ranges, with a slight concussion.
(B) The Amount of Investment Continued to Increase Positive Slightly
From January to August, the industry actually completed a total investment of 188.245 billion Yuan, an increase of 6.55%. Since early 2009 the cumulative growth rate trend has showed a sustained jack- up year-on-year. The growth rate slowed down after May. Since beginning of the year, the overall upward trend has been significant, reflecting business confidence in the market prospects, and constantly reinforced.
(C) Export is Still at the Bottom of the Shock
Textile and garment exports totaled 107.534 billion U.S. dollars from January to August, dropped 11.78 percent, a decline expanded 0.66 percentage points compared with January to July 2009.
(D) Domestic Sales Grew Stably
The effect of macro-control policies continued to appear, showed an upward growth trend in domestic sales, and became the primary support factor in textile industry's recovery. From January to August, domestic textile sales summed to 1.845764 trillion Yuan, jumped 11.67%, picked up 5.04 percentage points, compared with January to February in 2009.
(E) Operational Quality has been Improved
Despite the financial crisis in the textile industry caused a grim external situation, the adjustment and upgrade has been accelerated; science, technology and operational management standards have been improved steadily. Above-scale labor productivity totaled 331.3 thousand Yuan / person (according to the total industrial output value terms), an increase of 8.90%.
2. Main Effect Factors
(A) The International Market's Downturn Restricted Industrial Export
At present, although the global economy is showing a trend of gradual improvement, consumer demand and the employment situation has not been improved synchronization, the overall situation is still not optimistic. With continued weakness situation in demand and the international market, China's textile industry's export volume and price appear homogeneous movements, export enterprises are still faced with shortage of orders and low prices squeeze profit pressure.
(B) Domestic Economic Recovery Boosted Domestic Industry
This year, China's economic resume became faster. From January to August total national industrial added value increased by 8.1%. Upturn in the domestic economy promoted growth of the industry's domestic sales. In August 2009, the national clothing retail sales grew 21.6%, increased by 5.7 percentage points, compared with January and February. Apparel retail sales grew 23.3%, higher than the 1-2 months 7.7 percentage points.
(C) The Loose Monetary Policies are Conducive for Enterprises to Improve Profitability
In the loose monetary policy environment, banks reduced the benchmark interest rate as a whole, corporate finance fees fell significantly. Finance charges in textile industry dropped 4.93%, interest expense decreased 11.12% year-on-year. Decline in financial expenses is beneficial to raise the level of corporate profits.
(D) Raw Material Price Increased Pressure on Business Costs
With demand-pull effects raw material prices in the first three quarters rose significantly compared with the beginning of the year. By the end of September 30, cotton (328 cottons) prices rose about 20%, viscose staple fiber surged more than 40%. The rise in international crude oil also led to a jump in chemical fiber raw material prices.
3. Running Trend of Textile Industry in the Whole Year
Judging from the current situation, the international market demand in 2009 is unlikely to resume totally during this year. The textile industry exports will basically maintain the current level of negative growth, while domestic demand will continue to be of steady growth, the growth rate is expected to accelerate, the support of the industry will be strengthened further more, the industry sales will go on steadily rising, there may be minor fluctuations and adjustment in benefits, but the whole trend is supposed to be further improved overall.
Source form China Textile Magazine
Subscribe this magazine for more fresh information on Chinese textile and apparel trades, in English, monthly!
T: +86 10 8522 9751
F: +86 10 8522 9277
M: china.textile.serve@gmail.com
1 Comment
I read that the Econnomist said in 2010 China will see a 100% increase in the domestic fashion sector.
Leave a comment