January-August 2022 China Apparel Industry Report

This year, China's apparel industry is facing a more complex and severe situation, the global epidemic continues to spread, the risk of economic stagflation rises, the domestic epidemic epidemic epidemic, high temperature extreme weather and other factors beyond expectations on the production, consumption impact, the lack of market demand, the industry chain supply chain is not smooth and other production and operation difficulties are more prominent, restricting the stable recovery of the industry's economic operation. August, in a series of national Under the support of "stable growth" policy measures, China's apparel domestic market gradually rebounded, investment to maintain good growth, but the contraction of external demand, epidemic disturbances, high costs and geopolitical risks and other adverse factors, production fell slightly, export growth fell sharply, efficiency growth continues to be under pressure. Looking ahead to the whole year, the current instability and uncertainty has increased significantly, there are still many difficulties and challenges in the production and operation of enterprises, the garment industry economic operation to maintain a stable recovery is still facing a huge test.

 

Economic operation of the apparel industry.

 

Garment production fell slightly

 

In August, by the domestic epidemic emanating more, the lack of market demand, orders to accelerate the outflow and some provinces and cities, such as high temperature power restrictions, the garment industry above-scale enterprises industrial value added decline has deepened, clothing production for three consecutive months of negative growth, clothing production recovery process has slowed significantly. According to the National Bureau of Statistics data, in August, the apparel industry above-scale enterprises industrial added value fell 1.3% year-on-year, the rate of decline than in July deepened 1.1 percentage points; January-August, the apparel industry above-scale enterprises industrial added value rose 2.9% year-on-year, the growth rate than January-July slowed 0.7 percentage points, compared with the same period in 2021 slowed by 7.0 percentage points. During the same period, enterprises above the scale completed 15.259 billion pieces of clothing production, down 1.42% year-on-year, a decline of 0.12 percentage points narrower than in January-July, down 14.27 percentage points over the same period in 2021; of which, woven clothing production of 5.736 billion pieces, down 2.07%; knitted clothing production of 9.523 billion pieces, down 1.03% year-on-year.

Domestic market rebounded steadily

 

Benefiting from the governments at all levels to efficiently coordinate the epidemic prevention and control and economic and social development, as well as to promote consumption policies on the ground to show results, the domestic apparel sales market to maintain a good recovery, online retail sales growth rate has steadily rebounded, the entity store business to good. However, due to the domestic epidemic emanation more frequent on the residents of social travel, business operations still cause greater restrictions, residents of clothing goods optional consumption will still need to further enhance. According to the National Bureau of Statistics data, the retail sales of apparel goods in units above the limit in August increased by 6.0% year-on-year, the growth rate accelerated by 4.7 percentage points compared with July; January-August, China's retail sales of apparel goods in units above the limit accumulated 581.4 billion yuan, down 5.5% year-on-year, the decline narrowed by 1.4 percentage points compared with January-July. Online apparel retail sales maintained steady growth, with online retail sales of wearing goods increasing by 4.0% year-on-year from January to August, a growth rate of 0.6 percentage points faster than that of January to July. Summer vacation travel, social consumption willingness to enhance the physical store operations continue to improve, according to statistics from the China National Commercial Information Center, in August, the retail sales of apparel products of the country's 100 key large retail enterprises grew by 2.1% year-on-year, 3.6 percentage points higher than in July.

 

Downward pressure on exports increases

 

From January to August, China's apparel exports continued to maintain rapid growth on the basis of a high base in 2021, showing strong development resilience. But by the U.S. "border bill" officially came into effect, the growth rate of clothing exports in August slowed significantly, especially to the U.S. cotton clothing exports showed a double-digit decline. According to China Customs data, January-August, China's total exports of garments and clothing accessories 118.034 billion U.S. dollars, up 11.6% year-on-year, the growth rate than January-July slowed by 1.3 percentage points; August month exports of garments and clothing accessories 18.486 billion U.S. dollars, up 5.1% year-on-year, slowed by 13.4 percentage points over the month of July.

 

Woven garment exports fell in volume and price, price growth pull effect continues to strengthen. According to China Customs data, January to August, the number of garment exports 23.45 billion pieces, up 3.8% year-on-year, the average unit price of exports 4.32 U.S. dollars, up 13.4%. Among them, knitted garment exports rose in volume and price, the number of exports and export unit price increased by 7.2% and 9.9% respectively; woven garment exports fell 1.4% year-on-year, the export unit price increased by 19.4%. From the breakdown of categories, January to August, commuting, sports and social and other high value-added clothing exports grew rapidly, coats, down jackets and other cold clothing and shirts exports increased by 39.9% and 38.1%, sweater-type clothing exports increased by 24.7%, sportswear and skirt clothing exports increased by 19.0% and 19.9%; and underwear, pajamas and other home class Garment exports of underwear, pajamas and other home furnishings grew by 10.9% year-on-year, with a significant slowdown. During the same period, China's exports of epidemic prevention materials fell sharply, exports of plastic and vulcanized rubber gloves fell 65.7% year-on-year, chemical fiber protective clothing fell 54.5%.

 

From the perspective of the main export markets, in August, China's exports of clothing to the U.S. a large drop in the growth rate of exports of clothing to the EU slowed, while exports of clothing to ASEAN accelerated growth, a small rebound in exports of clothing to Japan. According to Chinese customs data, January-August, China's exports of apparel to the United States $ 27.84 billion, an increase of 11.1% year-on-year, the growth rate than January-July slowed by 4.6 percentage points; August month, by the United States "Border Act" came into effect, China's exports of apparel to the United States from the first three months of more than 20% of the rapid growth to From January to August, China's apparel exports to the EU amounted to US$24.33 billion, up 19.0% year-on-year, slowing down 2.8 percentage points from January to July; in August, due to high inflation and weakening consumer demand in the EU, China's apparel exports to the EU grew only 5.6% year-on-year. In August, due to high inflation and weakening consumer demand in the EU, China's apparel exports to the EU grew by only 5.4% year-on-year, slowing by 25 percentage points from July, and declining by 22.8% from a year earlier. During the same period, China's apparel exports to ASEAN grew strongly, up 30.1% year-on-year, with a growth rate of 0.8 percentage points faster than in January-July; China's apparel exports to Japan turned from decline to rise, up 1.1% year-on-year, 2.4 percentage points higher than in January-July. From the export region, China's garment exports to countries and regions along the Belt and Road, Latin America and Oceania continued to maintain rapid growth, an increase of 16.2%, 31.5% and 18.8%, respectively, pulling China's garment exports grew by 5.9 percentage points, to Africa's garment exports fell 11.5% year-on-year. In addition, China's apparel exports to Canada and Russia fell 8.0% and 23.7% year-on-year, respectively.

 

The growth rate of major apparel export provinces and cities slowed slightly, and the rate of decline in Guangdong's apparel exports deepened. 1-August, China's top five apparel export provinces Zhejiang, Guangdong, Jiangsu, Shandong and Fujian together completed apparel exports of $84.32 billion, up 9.6% year-on-year, accounting for 71.4% of China's total apparel exports, down 1.3 percentage points over the same period in 2021. Among them, Zhejiang garment exports amounted to 24.37 billion U.S. dollars, up 25.4% year-on-year, the growth rate than January-July slowed 4.8 percentage points, still higher than the national average growth rate of garment exports; Guangdong garment exports fell 6.6% year-on-year, a decline of 1.6 percentage points deeper than in January-July; Jiangsu, Shandong and Fujian Province garment exports grew 11.3%, 17.1% and 1.6%, respectively. Than the January-July slowdown of 2.6, 3.1 and 3.4 percentage points, respectively. In addition, Shanghai's garment exports grew 11.5% year-on-year, slowing by 1.1 percentage points from January to July. In the central and western provinces, Xinjiang garment exports accelerated growth, up 81.1%, 11.4 percentage points faster than in January-July, Jiangxi, Hunan, Liaoning, Sichuan garment exports have maintained rapid growth, an increase of 49.1%, 62.7%, 22.6% and 61.4%, while Hubei, Hebei and Guangxi garment exports fell by 9.7%, 46.4% and 35.8%.

 

Enterprise efficiency continues to be under pressure

 

This year, by the epidemic disturbances, orders, high costs and other multiple factors, China's garment industry, the main efficiency indicators continue to slow down the growth rate of economic operation under severe pressure. According to the National Bureau of Statistics data, January-August, China's apparel industry above-scale (annual main business income of 20 million yuan and above) 13,117 enterprises, operating income of 950.401 billion yuan, up 3.71% year-on-year, the growth rate than January-July slowed 0.2 percentage points, 5.87 percentage points slower than the same period in 2021; total profits of 43.57 billion yuan, up 3.37%, a slowdown of 0.59 percentage points from January to July and 6.16 percentage points from the same period in 2021. Industry operating efficiency decline, the high cost of enterprise profitability is difficult to improve. 1-August, the apparel industry enterprises above the scale of finished goods turnover rate of 11.91 times / year, down 3.34%; operating costs rose 4.43% year-on-year, higher than the growth rate of operating income 0.72 percentage points, per 100 yuan of operating income containing costs 86.08 yuan, an increase of 0.59 yuan over the same period in 2021 Operating income margin was 4.58%, down 0.02 percentage points from the same period in 2021.

 

Investment to maintain rapid growth

 

In August, China's apparel industry fixed asset investment growth rate fell slightly, but still continued to maintain rapid growth, showing that with the government at all levels to increase the support of the industry to complement the chain of strong chain investment, enterprise confidence in the industry's high-quality development gradually increased in automation digital intelligent technology transformation and upgrading, brand building and regional layout adjustment and other areas to increase investment, the depth of industrial transformation and upgrading to promote. According to the National Bureau of Statistics data, January to August, China's apparel industry fixed asset investment completed year-on-year growth of 30.9%, the growth rate of 26.1 percentage points over the same period in 2021, higher than the overall level of the textile and manufacturing industry 23.3 and 20.9 percentage points.