Official Report on development of Textile and fabric Industry in China from Q1 2022

Since the beginning of this year, under the influence of adverse factors such as repeated epidemics and rising structural costs, the downward pressure on the industrial textile industry has increased. To provide targeted advice and suggestions to enterprises, industries, and government departments, China Industrial Textiles Industry Association recently conducted an online survey on the operation of industrial enterprises in 2022 in the industry.

1. Basic information of the interviewed companies

The enterprises surveyed in this survey came from the sample database of the association’s statistics and received a total of 118 valid questionnaires within 4 days. From the perspective of regions, the interviewed enterprises are mainly concentrated in Jiangsu, Zhejiang, Shandong, and Guangdong regions, accounting for 72.17% of the total, and the rest of the interviewed enterprises are mainly located in Fujian, Anhui, Hubei, Hebei, and Henan, basically covering my country’s industrial applications. A major producer of textiles. From the perspective of industry distribution, the interviewed companies are mainly distributed in the fields of non-woven fabrics, medical and hygiene textiles, safety and protection textiles, filtration and separation textiles, thread belts, rope nets, interlinings, and other fields.

2. Industry operation from January to April 2022

(1) The operation of the industry continues to be under pressure, and the prosperity index is close to the critical value

The surveyed companies were not very satisfied with the operating conditions in the first 4 months. No company considered the current operating conditions to be “very good”. 25.42% of the enterprises considered the operating conditions to be “relatively good”. The proportion of “relatively poor” and “very bad” operating conditions reached 24.58%. Compared with January-February, the proportion of enterprises that believe that the business situation is “very good” and “relatively good” has dropped by 11.53 percentage points and 14.92 percentage points respectively, and the proportion of enterprises that believe that the business situation is “average” has increased by 7.63 percentage points. The proportion of enterprises with “very bad” and “very bad” conditions rose by 14.41 percentage points and 4.4 percentage points, respectively.

The business situation is indexed, and the industry’s prosperity index from January to April was 50.4, which has a significant downward trend compared with January to February (73.1), which is already close to the prosperity threshold (50). In terms of different fields, only the prosperity index of geotechnical and construction textiles and special textiles is better than the overall level of the industry. Among them, the prosperity index of special textiles has reached 68.2, and the prosperity index of nonwovens, safety and protective textiles has fallen below The line of prosperity and decline; the respondents in the field of medical and sanitary textiles are mainly sanitary ware companies. Since the sanitary ware industry is currently in the traditional off-season, the prosperity of the field has declined, but the respondents related to the production of anti-epidemic materials The development of the enterprise is good.

(2) The downward pressure on the economy has increased, and production has remained stable

Judging from the economic benefits of the interviewed companies from January to April, compared with the same period in 2021, the fluctuations are more obvious. More than 40% of the companies have a drop in operating income of more than 10%, 34.75% of the companies have basically the same operating income, and 22.03% of the companies. Operating income increased by more than 10%; in terms of profitability, 55.93% of the total corporate profits fell by more than 10% compared with the same period in 2021, 26.27% of the total corporate profits were basically the same, and 17.80% of the total corporate profits increased by more than 10%.

In terms of production, more than 80% of the interviewed companies have a capacity utilization rate of more than 60%, and more than 60% of the companies said that the output of major products is basically the same as the same period in 2021 or has an increase of more than 10%. Among them, the output of geotechnical and construction textiles, filtration and separation textiles, special textiles, and other sub-fields increased significantly year on year.

(3) The overall market demand has weakened, and the expansion of the international market has encountered bottlenecks

Regarding the current order situation, the interviewed companies generally stated that the order volume has decreased significantly compared with the same period in 2021. The domestic order index is 46.0 and the international order index is 38.5, both falling into the contraction range. The epidemic has caused the industry to be relatively isolated from the international market for a long time. In addition, the changes in shipping costs have made it more difficult for the industry to maintain and expand foreign markets.

(4) Overcoming the impact of the epidemic, the industry resumed work and production in good condition

Recently, the domestic epidemic situation has shown a steady decline as a whole, but the pressure on anti-rebound is still high. In some areas, local enterprises have frequently stopped work and production due to the impact of the epidemic. Judging from the feedback from the interviewed enterprises, enterprises in the current industrial textile industry can still maintain normal production and operation activities, and no large-scale shutdowns have occurred. Since 2022, 61.02% of the companies indicated that there has been no production stoppage, and the remaining companies said they had or are facing the situation of production stoppage; 84.78% of the companies that have stopped production and production have resumed normal production, 15.22% of enterprises said that they are still suspending production due to insufficient orders, poor business conditions or low employee arrival rates. None of the interviewed companies found any shutdowns due to epidemic prevention and control measures. Some companies in areas with severe epidemics temporarily adopted “closed-loop management” to maintain operations.

The current workforce stability of the interviewed companies is relatively high, and the employee turnover rate is relatively low. Nearly 90% of the companies have the same or increased number of employees compared to the end of 2021.

(5) High operating costs of enterprises and hindered price transmission

The prices of the main raw materials in the industrial textile industry have entered an upward trend since 2021, and are still at a relatively high level. The raw material price index has reached 72.0. More than 80% of the interviewed companies indicated that the prices of raw materials have risen to various degrees, and 44.83% of the companies said that up more than 10%. The labor cost index of enterprises was 72.8, and 47.41% of the enterprises indicated that labor costs increased by more than 10%. The high operation of raw material costs and labor costs did not drive the synchronous rise of product prices of enterprises. The product prices of nearly 60% of enterprises remained basically unchanged. The price index of main products of enterprises was 41.8, which has dropped to the contraction range compared with the beginning of the year (56.9). Among them, the prices of products in the sub-fields such as medical and hygiene textiles and non-woven fabrics fell significantly.