In 2023, the global economy exhibited a weak recovery trend overall, contending with geopolitical conflicts, trade disputes, inflation in various countries, subdued demand, and other adverse effects of the challenging environment. The global demand in the international market was low, and the industry faced continued pressure. Due to low demand in foreign markets and the effects of a high starting point, there was noticeable pressure on exports. And exports declined for the first time since 2017. The market situation varied among different subsectors of textile machinery in terms of sales. Weaving machinery and knitting machinery saw overall growth, while spinning machinery remained at a high level. On the other hand, sales of chemical fiber, nonwovens, printing, and dyeing machinery declined.

I. Economic Operation

Industry revenue continued to be under pressure and profitability turned to positive growth. According to the National Bureau of Statistics, the operating income of textile machinery enterprises above the designated size last year decreased by 1.47% year-on-year, narrowing by 0.65 percentage points compared with the first quarter of last year. The operating income growth has always been in the negative range, but the rate of decline narrowed. The total profits of textile machinery enterprises above the designated size grew by 0.13% year-on-year. Operating income margin reached 7.43%, seeing a increase of 1.15 percentage points over the same period of the previous year. 16.55% of textile machinery enterprises operated in deficit, which decreased by 0.48 percentage points year-on-year.

The decrease in costs and expenses of the textile machinery industry exceeded the decrease in revenue. According to the National Bureau of Statistics, the total cost of the textile machinery enterprises above the designated size decreased by 0.80% year-on-year in 2023. The share of three overheads in the turnover of textile machinery enterprises above the designated size was 10.53%, which was 0.61 percentage points higher than the same period in 2022. Selling expenses increased by 7.64% year-on-year, representing 3.82% of the total. Management expenses also rose by 5.14%, accounting for 6.10% of the total. Additionally, financial expenses grew by 29.47%, making up 0.61% of the total.

Accounts receivable and finished goods inventory of the industry decreased. According to the National Bureau of Statistics, the turnover of accounts receivable decreased by 4.70% year-on-year in 2023, which is 15.10 percentage points lower than the same period of the previous year. The inventory of finished goods of textile machinery enterprises above the designated size decreased by 3.25% year-on-year, which was 0.95 percentage points lower than the same period of the previous year.

II. Foreign Trade

According to the General Administration of Customs, China’s foreign trade of textile machinery totaled US$ 7.51 billion in 2023, declining by 14.18% year-on-year. Thereinto, the exports of textile machinery totaled US$ 4.54 billion, down 17.97% year-on-year, while the imports stood at US$ 2.96 billion, down 7.64%.

1. Import

In 2023, China imported US$ 2.96 billion worth of textile machinery from 65 countries and regions, down 7.64% year-on-year.

By product category, chemical fiber machinery ranked first, with imports amounting to US$ 1.06 billion, surging by 22.69% year-on-year, accounting for 35.99% of the total. Besides that, other categories all saw a decline in varying degrees, in which nonwoven machinery dropped the most.

Major exporters of textile machinery to China were dominated by Japan, Germany, Italy, Switzerland and Belgium in 2023, with the trade volume amounting to US$ 2.49 billion, seeing a year-on-year decrease of 4.23%. Japan continues to occupy the first place in the source of textile machinery exports, maintaining a positive growth trend.

2. Export

China exported about US$ 4.54 billion worth of textile machinery to 202 countries and regions last year, seeing a year-on-year decline of 17.97%.

Out of all the product categories, knitting machinery exports have secured the leading position, accounting for 26.31% of the total export value. Its exports totaled US$ 1.19 billion, down by 9.92% year-on-year. All seven categories of textile machinery saw different ranges of decline.

As for the export destinations, China’s textile machinery exports to India, Vietnam, Türkiye, Bangladesh and the United States accounted for 54.45% of the total exports last year, seeing a year-on-year decrease of 19.23%. The countries mentioned above are major destinations for China’s exports. Affected by the economic downturn, currency depreciation, and other factors, exports to Bangladesh and Pakistan have significantly decreased compared to the same period in 2022. Exports to countries and regions along the "Belt and Road" Initiative totaled US$ 3.43 billion, showing a 17.92% decrease compared to the previous year. Thereinto, exports to Northeast Asia, Central and Eastern Europe, and Central Asia have been increasing consistently.

III. Industry Situation Outlook

Looking ahead to 2024, the textile machinery industry faces a complex and unpredictable external environment. The global economy is still struggling with slow growth, and overseas market demand is yet to recover. Textile exports will continue to face challenges, but they still hold promise as a growth opportunity for the domestic textile machinery sector in the long run. The textile machinery industry shows a strong resilience in its development. Based on scientific and technological innovation, China’s textile machinery industry is expected to achieve stable operation in the economic recovery. By fostering new quality productive forces, China’s textile industry aims to realize high-end, intelligent, green, and integrated development.

Source: CHINA TEXTILE LEADER Express