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Analysis of operation data of China textile industry in 2020 and forecast of industry prospect in 2021

Fabric Factory

The textile industry is a traditional pillar industry of China’s national economy and an important industry for people’s livelihood. It is also an industry with obvious international competitive advantage in China.
The Covid-19 epidemic caused economic losses to domestic sales of textile enterprises, and also caused the loss of foreign trade orders of enterprises.
In 2020, the prosperity of the textile industry will maintain an expansion trend, with the increase of loss-making enterprises and the decrease of industry operating income, while the total profit will increase against the trend.
Looking forward to 2021, the development situation of the textile industry will still be complicated.

I. The development status of textile industry in 2020

1. The prosperity of the textile industry maintains an expansion trend

Since 2020, the overall prosperity of the textile industry has maintained expansion, and the capacity utilization rate has increased quarter by quarter.According to the survey data of China National Textile and Textile Industry Council, in the first quarter of 2020, the climate index of the textile industry dropped to below the critical point of 50 due to the impact of the epidemic. Since the second quarter, the climate index rose to above 50 and was 61.3 in the fourth quarter, which is a good level in recent years, indicating that the business confidence of enterprises is steadily improving.

2. Domestic demand sales continued to improve

Since the second quarter of 2020, with the orderly recovery of economic life and increasingly active consumer activities, the domestic market sales of the textile industry have improved quarter by quarter under the favorable support of various national policies to promote consumption.According to data from the National Bureau of Statistics, the retail sales of clothing, shoes, hats, needles and textiles sold by units above designated size in 2020 decreased by 6.6% year on year, 5.8 percentage points narrower than that in the first three quarters.

3. Expanding the loss area of the textile industry

Influenced by the epidemic, the textile industry is under great operating pressure. In 2020, there will be 18,344 textile enterprises in China, 18 less than the previous year, and 4,011 loss-making enterprises, 876 more than the previous year.The loss was 21.9 percent, 4.8 percentage points higher than the previous year.Losses totaled 16.1 billion yuan, up 10.7 percent year on year.

4. Decline in textile revenue

In recent years, the revenue of China’s textile industry has shown a downward trend.In 2020, the operating income of China’s textile industry was 2,277.84 billion yuan, a year-on-year decrease of 6.7%.

5. Continued restoration of benefits in the textile industry

With the gradual recovery of domestic and foreign market demand, as well as the significant effect of the country’s large-scale tax and fee reduction and other assistance policies and measures for enterprises, the economic benefits of textile enterprises have been steadily restored and improved quarter by quarter after experiencing a sharp decline at the beginning of the year.
In 2020, the total profit of the national textile industry was 110.54 billion yuan, with a year-on-year growth of 7.9%.

6. Improved profitability of textile industry

In recent years, the profitability of China’s paper industry shows a trend of improvement.In 2020, the gross profit rate of the national textile industry was 12.4%, 1.0 percentage points higher than that of the previous year, and the profit rate of sales was 4.9%, 0.7 percentage points higher than that of the previous year.

II. Development Prospects of Textile Industry in 2021

2021 is the start of the implementation of new development cycle in China, the situation facing the development of the textile industry will continue to be complex, global outbreak has not been thoroughly relieve, external demand continues to weaken, trade environment risk factors still exist, such as increased risk of adverse effects on the industrial chain of the supply chain stability is yet to be eliminated, the textile industry still faces big development in the international market pressure.
On the other hand, the textile industry is in the stage of deep adjustment and transformation. While dealing with the complex external situation, it still needs to resolve difficulties such as the increase of comprehensive costs, the arduous task of environmental protection, and the intensification of market competition, so it faces many challenges to maintain a smooth operation.

Overall, the expansion of domestic demand and consumption upgrade, a new round of technological revolution will drive the development of the textile industry.
Expanding domestic demand and upgrading consumption will be the biggest driving force for the development of China’s textile industry. The combination of development dividends and reform dividends, such as income growth of urban and rural residents, new urbanization construction and the full implementation of the two-child policy, will promote the growth of textile consumption.
The in-depth application of information technology in design, production, marketing, logistics and other links of the textile industry will promote the transformation of the production mode to flexibility, intelligence and refinement, and the transformation from traditional production and manufacturing to service-oriented manufacturing.
The deep integration of the textile industry with information technology and the Internet has provided a broad space for innovation and development.

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Business Director at Shanghai Fumao Clothing Co.,LTD

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