Current situation of the textile industry: The macro trend is improving, but downward pressure still exists
As the financial crisis intensifies, various countries have adopted different methods such as interest rate cuts, capital injections, and tax cuts to actively respond in an attempt to reduce the impact of the crisis, slow down the pace of recession, and boost development confidence. Some even call this economic adjustment involving various countries as economic “defense.” war”. Due to the high dependence of my country’s textile industry on exports, the survival situation is changing at any time in the comprehensive game of increasing economic recession pressure in major international markets and frequent introduction of domestic adjustment policies. Although the general climate recovery is important, slight changes in the internal and external economic situation sometimes also brew large-scale changes.
With the release of the overall first-quarter operating data from various institutions in April, the feeling of “economic imbalance has bottomed out, my country’s economy is showing a positive trend, and the textile industry is facing greater downward pressure.” Behind the mixed analysis, the opportunity space is gradually becoming clearer.
Economic disequilibrium bottoms out and external market demand is suppressed
In the past quarter, from the perspective of major real economic statistical indicators, regional differences are very obvious – the United States has turned from overall deterioration to good and bad, major European data continues to decline, and the decline rate of emerging economies exceeds As expected, a series of signs indicate that the economy is in a non-equilibrium bottoming stage.
The U.S. is approaching the bottom of adjustment and the demand situation is still not optimistic
Judging from the recently released U.S. economic data, most indicators are better than market expectations. Some analysts even believe that the U.S. data is turning from an overall deterioration to a mix of good and bad, indicating that the U.S. economy may be approaching the bottom of the adjustment. .
The Institute for Supply Management (ISM) recently announced that the U.S. Manufacturing Purchasing Managers Index (PMI) in March was 36.3, which not only exceeded expectations by 0.3 points, but also marked the third consecutive month of rebound for this data since January this year; Among them, the new orders index of the U.S. manufacturing industry has recovered significantly compared with the end of 2019. The new orders index in February 2019 was 10 percentage points higher than that in December 2019. Although judging from the data, the Purchasing Managers Index (including the new orders index) is still below the 50 threshold that separates the boom and bust of the economy, the continuous rise in the index has given the U.S. manufacturing industry a clear signal of stabilization and recovery.
In addition, the newly released University of Michigan consumer confidence index (preliminary value) in April has risen to 61.9, much higher than the original expected value of 58.5, and continues to increase by 4.6 points compared with the confidence index in March. This shows that the consumer confidence of the American people has rebounded significantly, and it is expected that domestic private consumption in the United States will gradually grow as this index increases.
Although at present, the above major economic indicators are clearly stabilizing and recovering, these indicators may also fluctuate with monthly changes, and because it will take a long time to resolve the problems in the U.S. financial system and the U.S. unemployment rate continues increase, so market demand in the United States will remain suppressed in the short term.
The market performance of this demand suppression is a decline in retail consumption and a reduction in import demand. According to data from the U.S. Department of Commerce, from January to March this year, the cumulative retail sales of consumer goods in the United States fell by 8.89% year-on-year, of which the retail sales of clothing and apparel dropped by 4.76%. During the same period, the total amount of textiles and clothing imported into the United States fell by 13.53% year-on-year. It can be seen that at this stage, the economic engine of the United States is actively reducing consumption. And because its status as an important export market cannot be shaken, its reduction in consumption will result in a shrinking of exports. In this round of trade adjustments, China’s textile and apparel exports to the United States have also been greatly affected. According to my country’s customs data, from January to March this year, my country’s textile and apparel exports to the United States fell by 8.05% year-on-year.
The European economic downturn is obvious and the demand decline is difficult to reverse
Although they are all important developed economies, the European economy is far from showing signs of stabilization and correction as shown by the United States. Since the beginning of this year, regardless of whether it is the 16 countries in the Eurozone or the 27 EU countries, major indicators such as manufacturing capacity utilization, economic prosperity index and consumer confidence index have continued to decline in the past few months. According to relevant data, the manufacturing capacity utilization rate of the 27 EU countries was 74.9 in March this year, down 8.7 points from the end of last year; in March, the prosperity index of the 27 EU countries also fell from 66.6 at the end of last year to 60.3; during the same period , the consumer confidence index of the 27 EU countries fell to -31.7, continuing to fall by 3.5 points from the end of 2019.
In addition, the manufacturing and service PMI indexes in the Eurozone were 34 and 40.1 respectively in March this year. The manufacturing PMI index increased slightly by 0.1 points compared with the end of 2019, but the service PMI index fell by 2 points compared with the end of 2019. points, the two indicators are in the stage of fluctuation adjustment, and it is still unclear whether they will stabilize and rebound.
Judging from the above indicators, Europe’s economic performance is not optimistic. At the same time, some European institutions and systems will also affect the release of its economic momentum. On the one hand, because Europe has always regarded inflation as a scourge, it has been cautious in adopting loose stimulus policies, which will inevitably affect the vitality of the European economy; on the other hand, there are many European member states, their economies are integrated, and they have established a unified central bank. , it will also affect other aspects to a certain extent.Judging from the electricity consumption situation of the whole society in March, the electricity consumption of the textile industry has also improved significantly and rebounded.
Although it is not yet possible to judge whether the industry has shown signs of recovery based on the month-on-month recovery data in just one month, the current data performance does bring a sense of spring to the industry. There is reason to believe that after April, as my country’s textile and apparel export tax rebate rate continues to increase to 16%, this export growth momentum will continue to be maintained. At the same time, we also look forward to benefiting from the improvement of the export environment, and the industry operation can gradually enter the recovery track. As for when the industry will pick up, we still need to continue to observe the trend of data. It is firmly believed that after this round of adjustments, the position of my country’s textile industry in the market will be further consolidated and improved.
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