In the first three quarters of 2021, facing the complex situation at home and abroad, China's textile industry has fully implemented the decisions and deployments of the Party Central Committee and the State Council. The overall prosperity of the textile industry has maintained an improved trend; corporate profits have been steadily improved; investment confidence has continued to recover; and the main operating indicators have achieved a steady recovery from the low base in the same period of the previous year. Looking forward to the fourth quarter and 2022, the development facing the textile industry is still complicated.

I. Prosperity Index & production

Since the beginning of 2021, with the stable domestic epidemic prevention and control and the recovery of overall market demand, the prosperity index of China's textile industry remained in the expansion range. And the level of capacity utilization has been generally good. According to the survey data of the China National Textile and Apparel Council, in the third quarter of 2021, the prosperity index of China's textile industry was 58.7, which was above the boom-bust line (50) for six consecutive quarters. Although it was down by 6.7 percentage points from the second quarter this year, the prosperity index of the textile industry was still at a high level. According to data from the National Bureau of Statistics, in the first three quarters, the capacity utilization rates of the textile and chemical fiber industries were 79.6% and 85.2%, respectively, which were both higher than the national industrial level (77.6%) during the same period, up by 7.2 and 6.1 percentage points from the same period last year, respectively. 　

The production in China's textile industry recovered steadily. According to data from the National Bureau of Statistics, in the first three quarters of 2021, the added value of the textile industry above designated size increased by 6.3% year-on-year, 10.9 percentage points rebounded from the same period last year, but dropped by 14 and 3.3 percentage points from the first quarter and the first half of this year, respectively. Taking the third quarter of 2019 as the base period, the two-year average growth rate was 0.7%, indicating that the industry's production scale has exceeded the level before the epidemic. Over 80% of the sectors in the industrial chain maintained steady production. In the first three quarters, the added value of the textile, chemical fiber, and apparel industries increased by 3.7%, 10.7%, and 9.2% year-on-year, respectively. And the average growth rate of the added value of the textile and chemical fiber industries reached 1% and 5.3%, respectively.

II. Domestic demand & export

In the first three quarters of 2021, driven by the recovery of the national economy, the measures to promote consumption and expansion of domestic demand in various regions, and multiple holidays, the domestic textiles and apparel market in China maintained the recovery growth. According to data from the National Bureau of Statistics, in the first three quarters of 2021, the retail sales of clothing, foot & head wear and knitted goods above designated size up 20.6% year-on-year. The growth rate rebounded by 33 percentage points from the same period last year, and the two-year average growth rate was 2.8%. Online consumption played an important role in stimulating the domestic demand market. In the online retail sales of physical commodities, wearing goods increased by 15.6% year-on-year. The growth rate increased by 12.3 percentage points from the same period last year, and the two-year average growth rate was 9.3%. 　

Affected by the rebound in international market demand and the return of some overseas orders, China's textile and apparel exports have maintained a good growth. However, due to the reduction in the export of epidemic prevention materials, the export growth rate has shown a slowdown. According to data from China Customs Express, in the first three quarters of 2021, China's textile and apparel exports totaled US$ 227.59 billion, up by 5.6% year-on-year, 6.5 percentage points slower than that of the first half of 2021. The apparel exports have improved significantly. In the first three quarters, apparel exports reached US$ 122.41 billion, up by 25.3% year-on-year, which was the highest growth rate in the same period since 2010. Since the beginning of 2021, international demand for epidemic prevention materials fall back to the normal level. In the first three quarters, China's exports of masks and protective clothing plunged by 79.4% year-on-year. Affected by this, textiles exports were US$ 105.18 billion, down 10.7% year-on-year.

III. Corporate benefits & investment confidence

According to data from the National Bureau of Statistics, in the first three quarters, the total operating income of 34,000 textile enterprises above designated size across the country reached CNY 3.67 trillion, up by 15.6% year-on-year, 27.7 percentage points higher than the same period last year. Their total profit was CNY 171.05 billion, seeing a year-on-year increase of 31.7%, 43.8 percentage points higher than the same period last year. The operating income margin was 4.7%, 0.6 percentage points higher than the same period last year. More than 90% of the textile industry chain has a good growth momentum, and the profits of more than 70% of the textile industry chain have increased by more than 30%. Driven by the increase in commodity prices, the total profit of the chemical fiber industry in the first three quarters surged by 318% year-on-year. Its operating income margin reached 6.3%. And its profitability level ranked first in the textile industry. In addition, the operating efficiency and capital turnover of enterprises have been improved. In the first three quarters, the turnover rate of finished products and total asset turnover of textile enterprises above designated size were 12.8 times/year and 1.1 times/year, respectively, up by 8.7% and 8.9% year-on-year. The share of three overheads in turnover was 6.6%, 0.4 percentage points lower than the same period last year.

Corporate investment confidence improved continually, and the scale of investment continued to rise. According to data from the National Bureau of Statistics, in the first three quarters, China's textile, chemical fiber, and apparel industries increased by 13.5%, 29.5%, and 3.1% year-on-year in fixed-asset investment respectively, 24.8, 51.8, and 35.8 percentage points higher than the same period last year. Among them, the two-year average growth rate of investment in the textile and chemical fiber industries was 0.3%, and the investment scale has basically returned to the level before the epidemic.

Source: CHINA TEXTILE LEADER Express