Economic Analysis and Forecast of China's Textile Industry in 2012 (I)

The overall textile industry remained stable in 2012, but the industry still faces a series of risks, including the shrinking international market, the slowdown in the domestic market, and the rising costs of production factors. In the first half of the year, the industry will operate under tight and more severe circumstances. . Accelerating structural adjustment, transformation and upgrading, striving for national policy support, reducing operational risks, and promoting stable economic growth are the arduous tasks facing the textile industry.

Due to the sluggish international market, raw material price fluctuations, substantial increases in factor costs, and capital shortages, the Chinese textile industry has passed an extraordinary year in 2011, and the growth rate of various economic indicators has slowed down, especially exports and Profit, the operating status of SMEs is not optimistic. According to the analysis of the China Textile Industry Federation, in the first half of this year, in the face of the pressure of the country’s macroeconomic downturn, some of the original contradictions and problems will be carried over to this year, and new uncertainties will also affect the textile industry in China. The overall situation is severe.

2011 growth rate slows down in industry profit growth

In 2011, the major economic indicators of the Chinese textile industry maintained rapid growth, and the operating situation was basically stable. However, various types of risks faced by the industry in operation have increased significantly compared with 2010. The international market has continued to slump, raw material prices have been ups and downs, production costs have continued to rise, environmental tightening and other factors have increased operating pressure, and the growth rate of major economic indicators has slowed down. The momentum, export volume, and industry profit growth have been particularly declining. The operation of small and micro enterprises has encountered major difficulties.

According to data from the National Bureau of Statistics, in 2011, 36,000 textile enterprises above designated size achieved a total industrial output value of 478.865 billion yuan, a year-on-year increase of 26.8%; sales value of 530.17 billion yuan, a year-on-year increase of 26.86%. Chemical fiber production reached 33.624 million tons, an increase of 13.9%; yarn production reached 28.945 million tons, an increase of 12.4%; cloth production reached 6.198 million meters, an increase of 11.6%; clothing production reached 25.42 billion, an increase of 8.1%. The total investment in fixed assets of projects with a total investment of over 5 million yuan was 679.91 billion yuan, an increase of 36.3% year-on-year. Enterprises above designated size achieved a profit of 295.642 billion yuan, a year-on-year increase of 25.94%. However, compared with the first half of the year, the profit growth rate has dropped significantly. The main reason is that the industry is facing increasing pressure from cost elements such as raw material costs, labor costs, and capital costs.

On the export side, according to customs statistics, in 2011, the total value of textile and apparel exports was 254.12 billion U.S. dollars, an increase of 19.9% ​​year-on-year; among them, export prices increased by 19.3% year-on-year, and the number of exports only increased by 0.5% year-on-year. From the point of view of the export product structure, the number of varieties whose exports have declined is mainly related to cotton products, including cotton yarns, cotton fabrics, cotton bedding, and cotton garments. As long as it involves cotton products, the number of exports has shown a negative growth. The reason is mainly related to the ups and downs of the cotton market price last year, which brought great difficulties to the export orders. At the same time, the domestic cotton price is higher than the international cotton price, which also led to a significant decline in the international competitiveness of China's cotton products.

Small and micro enterprises are in a difficult position and profit growth is only a single digit

According to the China Federation of Textile Industry's tracking data on key industrial clusters, in 2011 the sales revenue of enterprises below designated size increased by 6.71% year-on-year, and profits increased by 9.9% year-on-year, far below the growth level of enterprises above designated size. Their operating income growth and profit growth were only Digits. With 9 garments clusters with an export share of more than 20%, the total profit of the companies below the scale increased by only 4.7% year-on-year.

Stable start-ups in 2012. Potential risks The overall situation remained stable in 2012. However, the industry still faces a series of risks, including the shrinking international market, the slowdown in the domestic market, and the rising cost of production factors. In the first half of the year, the industry will tighten up. And run under a more severe situation. Accelerating structural adjustment, transformation and upgrading, striving for national policy support, reducing operational risks, and promoting stable economic growth are the arduous tasks facing the textile industry.

In 2012, the textile industry started basically stable. Large enterprises, self-owned brand enterprises, and domestic sales companies have sufficient operating costs and sufficient funds. The operating rate is 80% to 90%. The return rate of employees after the holiday is about 80%, and the employee turnover rate is 10% to 15%. The difficulties faced by some small and medium-sized micro-enterprises are obvious, especially for export-oriented small and micro enterprises. The reduction of orders, staff shortages, capital shortages and difficulties in transition are urgently needed for the government and industry to pay more attention.

Export demand lacks competitive pressure
In the first half of 2012, various unfavorable factors and risks faced by the operation of the industry have increased significantly, mainly in five aspects: First, the continued escalation of the European debt crisis has had a significant negative impact on the demand in the international market. The economic recovery in developed countries in the United States and Europe has been weak. The unemployment rate remained high, the employment structure deteriorated, and the confidence in the consumer market was sluggish, which restricted the demand for textiles and apparel, which led to a decrease in the growth rate of clothing exports in developing countries, and a corresponding slowdown in the demand for related industrial chains. It is expected that in the first half of 2012, China's textile and apparel export demand will be insufficient and competitive pressure will become more prominent. In the first half of the year, the number of industrial exports will be low or negative.

Second, in the first half of 2012, the textile industry will continue to show a tendency of being dominated by the domestic sales market. However, due to the slowdown of social investment growth, the weakening of export-led economic strength, and the active deepening adjustment of economic structure, it is expected that the macroeconomic growth rate will be lowered. Consumption growth may slow down over the previous year, which will directly result in a slowdown in the growth of clothing consumption.

Third, the domestic cotton market is complicated and ambiguous. If reserve cotton is thrown away with “cost + profit”, the domestic cotton price will increase, and the domestic and foreign cotton price gap will continue to widen. The international competitiveness of textile enterprises will be further weakened. The price of chemical fiber is affected by the price of cotton and the fluctuation of international crude oil prices, which may present a shocking trend and increase the operational risks of downstream companies.

Fourth, the increase in labor costs for textile enterprises has increased significantly. Samples show that more than 80% of enterprises have a shortage of labor, and wages have risen by more than 15%. Difficulties in recruiting workers, the mobility of workers, and the improvement in the living conditions of employees have all made the company's labor costs appear rigid.

Fifth, textile small and medium-sized micro enterprises still face problems such as unfavorable market conditions, high cost, and unstable order quantity. In particular, export-processing companies have weak anti-risk capabilities once the appreciation of *** is still present. Excessive closure of enterprises will directly affect employment and social stability.

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