Production situation is gradually improving Production scale has slightly decreased
According to the National Bureau of Statistics, from January to March 2023, the output of dyed fabrics by large-scale enterprises in the dyeing industry reached 12.491 billion meters, a decrease of 0.27% year-on-year, with the decline narrowing by 7.83 percentage points compared to January-February. In terms of monthly output, in March, the output of dyed fabrics by large-scale dyeing enterprises reached 5.826 billion meters, an increase of 11.37% year-on-year. In the first quarter, the production situation in the dyeing industry gradually improved. The decline in dyed fabric output in January-February continued the trend of continuous expansion since the fourth quarter of 2022. In March, the production situation improved significantly, with monthly output reaching a new high in nearly a year, and the cumulative output decline narrowed. The improvement in the industry's production situation is mainly due to the optimization and adjustment of China's epidemic prevention and control policies, which has accelerated the recovery of offline consumption scenarios and a slight rebound in terminal consumption. Data from the National Bureau of Statistics shows that in the first quarter, the retail sales of clothing, shoes, hats, and textiles by above-scale units in China increased by 9.0% year-on-year, an increase of 9.9 percentage points compared to the same period last year. In the online retail sales of physical goods, the retail sales of clothing increased by 8.6% year-on-year, 1.3 and 1.7 percentage points higher than the growth rate of food and daily necessities, respectively.
Industry profitability remains under pressure The decline in profits has narrowed
According to the National Bureau of Statistics, from January to March 2023, the operating income of large-scale dyeing enterprises reached 65.336 billion yuan, a decrease of 4.18% year-on-year, with the decline narrowing by 5.35 percentage points compared to January-February; the total profit reached 1.193 billion yuan, a decrease of 36.67% year-on-year, with the decline narrowing by 52.62 percentage points compared to January-February; the sales profit margin was 1.83%, a decrease of 1.07 percentage points year-on-year, which is a relatively low level in recent years. Among the 1,732 large-scale dyeing enterprises, 787 enterprises suffered losses, with a loss rate of 45.44%, an increase of 6.62 percentage points year-on-year; the total losses of loss-making enterprises reached 1.461 billion yuan, an increase of 44.13% year-on-year. In the first quarter, the main economic benefit indicators of the dyeing industry continued to decline, and the pressure on industry profitability remained prominent, with the industry's loss rate remaining high, but signs of improvement in the industry's economic benefits appeared in March. The main reasons for the pressure on profitability in the dyeing industry are: firstly, affected by the complex international situation, the prices of the main raw materials in the dyeing industry remain high and volatile, and the energy costs of enterprises remain high, highlighting the cost pressure on the production side; secondly, market demand remains insufficient, and prices are not smoothly transmitted to the downstream of the industrial chain, significantly affecting the operating profits of enterprises.
Exports maintain growth Main products see increased volume but decreased prices
According to data from the General Administration of Customs of China, from January to March 2023, the export volume of eight major categories of dyed products reached 8.008 billion meters, an increase of 11.60% year-on-year, with the growth rate falling by 2.50 percentage points compared to the same period last year; the export value reached US$7.853 billion, an increase of 2.25% year-on-year, with the growth rate falling by 22.64 percentage points compared to the same period last year; the average export unit price was US$0.98/meter, a decrease of 8.38% year-on-year, with the growth rate falling by 17.84 percentage points compared to the same period last year. Among the main export products, the export volume of T/C dyed fabrics and man-made fiber staple fiber fabrics increased rapidly, with growth rates reaching 272.76% and 19.68%, respectively; the export unit price of polyester staple fiber fabrics increased by 17.10%, which is the only category among the eight major categories of dyed products with an increase in export unit price. Among the main export markets, China's exports of eight major categories of dyed products to RCEP trading partners and ASEAN countries increased by 6.62% and 7.23% respectively in terms of volume, and decreased by 1.50% and 2.24% respectively in terms of value. In the first quarter, facing the shrinking international market demand, China's dyeing industry exports still maintained a good momentum, and the exports of major products continued to grow on the basis of a high base in the same period last year, but the average export unit price fell significantly, reflecting the intensified competition in the current industry exports.
In general, in the first quarter, with China's epidemic prevention and control transitioning relatively quickly and smoothly, and various policies and measures to stabilize growth, employment, and prices taking effect in advance, positive factors have accumulated and increased, and the overall economic operation of the dyeing industry has achieved a stable start. Looking forward to the second quarter, moderate recovery will still be the main trend, but the recovery process will be affected by multiple factors. First, the current recovery of domestic consumption is not yet stable, and insufficient domestic demand is still the primary problem facing the industry. It will take a long time for enterprises to improve their profits, and the expectations and confidence of economic entities need to be further boosted. Second, the international environment remains complex and changeable, and the expected slowdown in global economic growth has risen significantly, which will gradually affect the industry's exports. The industry's exports will face many uncertainties in the second quarter. On the positive side, China's macroeconomic situation has become increasingly better overall, with GDP growth exceeding expectations in the first quarter. It is expected that the domestic economy will continue to recover and improve in the second quarter. The steadily improving macroeconomic fundamentals, the gradually improving employment situation and consumer expectations, and the continuously released potential of the ultra-large-scale domestic market will be important supports for the steady recovery of the industry.
