Analysis Of China'S Industrial Textile Industry Economy In 2022

　　 one Economic operation of industrial textile industry in 2022

In 2022, "Black Swan" and "Grey Rhino" events will occur frequently, and the world economic growth will decline significantly; The domestic economy is affected by multiple factors that exceed expectations. The triple pressures of demand contraction, supply shock, and weakening expectations continue to evolve, and the complexity, severity, and uncertainty of the development environment rise. China's industrial textile industry is still in the recovery and adjustment period after the extraordinary growth in 2020. The industry has made efforts to overcome the impact of internal and external adverse factors. The industrial added value has grown steadily, and production and sales have remained relatively stable. However, some economic indicators are still at a low level, and the foundation for the sustainable recovery of the industry needs to be further consolidated.

According to the survey of nearly 300 sample enterprises conducted by China Industrial Textiles Industry Association (hereinafter referred to as "the Association"), the prosperity index of the industry in 2022 is 57.3, which is significantly lower than that in the same period of 2021 (73.8), but has rebounded to above the boom and bust line compared with the first half of 2022.

Prosperity index of China's industrial textile industry in recent years

Source: China Industrial Textile Industry Association

　　 1、 The capacity utilization rate decreases before and increases after, and the production keeps stable operation

In 2022, China's industrial textile industry will continue to adhere to the concept of high-quality development, and the production of major products will remain basically stable. The capacity utilization rate of the industrial textile industry showed a trend of decreasing from beginning to end. According to the survey of sample enterprises by the Association, the industry capacity utilization rate in the first quarter of 2022 was only about 50% affected by repeated epidemics and poor logistics. Since then, the capacity utilization rate has continued to rise. By the end of 2022, it has recovered to more than 70%, and the capacity utilization rate of more than 20% of sample enterprises exceeded 90%.

According to the statistics of the Association, the total fiber processing volume of China's industrial textile industry will reach 19.601 million tons in 2022, up 1.1% year on year. As the main raw material of industrial textiles, the output of nonwovens in China was 8.135 million tons, down 0.8% year on year.

　　 2、 High cost, economic operation under pressure

According to the data of the National Bureau of Statistics, the operating revenue of enterprises above designated size in the industrial textile industry (non full caliber) in 2022 is basically the same as that of the same period in 2021. The total profit is 8.9% lower than that of the same period last year, and the operating profit margin is 4.7%, 0.5 percentage point lower than that of the same period last year. The level of operating profit margin is at a low point in recent years.

Operating profit rate of enterprises above designated size in China's industrial textile industry (unit:%)

Source: According to the data of the National Bureau of Statistics

The high operating costs of enterprises caused by repeated epidemics, fluctuations in raw material costs and other factors are the main reasons for the decline of industry profitability. According to the survey of the Association, the raw material price index of the sample enterprises in 2022 will be 71.3, although it has declined compared with the same period in 2021 (87.4), it is still at a high level; In addition, the logistics and transportation costs under the epidemic prevention and control also pushed up the operating costs of the industry. More than 60% of the sample enterprises said that the logistics and transportation costs had increased to varying degrees in 2022.

Excessive competition is also one of the reasons for the decline of industry profitability. According to the data of the National Bureau of Statistics, the number of enterprises above designated size in the industrial textile industry in 2022 has increased significantly by 50.6% compared with 2019. The rapid growth of the number of enterprises has intensified the intensity of market competition, and the bargaining space of enterprises has further narrowed. According to the research of the Association, the price index of the main products of enterprises in 2022 is only 38.7, which is significantly lower than that in the same period of 2021 (55.0). Excessive competition has also led to the further acceleration of business differentiation. According to the data of the National Bureau of Statistics, in 2022, the loss of enterprises above the designated size in the industrial textile industry will reach 19.6%, and the loss of loss making enterprises will increase by 27.8% year on year.

Growth rate of major economic indicators of China's industrial textile industry in 2022 (enterprises above designated size)

Source: According to the data of the National Bureau of Statistics

In terms of different fields, according to the data of the National Bureau of Statistics, in 2022, China's nonwoven industry will operate under pressure. The operating income and total profit of enterprises above designated size will decrease by 0.7% and 24.9% respectively year on year, and the gross profit margin and operating profit margin will be 14.3% and 3.8% respectively, down 1.6 percentage points and 1.2 percentage points respectively year on year.

The operating income and total profit of enterprises above designated size in the rope, cable and cable industry decreased by 1.5% and 17.8% respectively year on year, and the gross profit margin and profit margin were 13.6% and 4.1% respectively, down 0.7% and 0.8% respectively year on year.

The operating income and total profit of enterprises above designated size in the textile belt and cord fabric industry decreased by 6.3% and 2.7% respectively year on year, and the gross profit margin was 15.2%, down 0.1 percentage point year on year, while the profit margin was 5.3%, up 0.2 percentage point year on year.

Benefiting from the rapid development of the "camping economy", the awning and canvas industries maintained a good momentum of development. The operating income and total profit of enterprises above the designated size increased by 0.2% and 16.6% respectively year on year, and the gross profit margin and operating profit margin reached 17.2% and 6.5% respectively, both of which were the highest levels in the industry.

Driven by new infrastructure construction and air pollution control, other industrial textile industries where geotextiles and filter textiles are located have stabilized and improved. The operating income and total profit of enterprises above designated size increased by 4.4% and 10.2% respectively year on year, and the gross profit margin was 16.1%, down 0.4 percentage points year on year. The profit margin was 5.9%, up 0.3 percentage points year on year.

　　 3、 The willingness to invest has weakened, and high-quality investment has been strengthened

The outbreak of COVID-19 has greatly expanded the production capacity of the nonwoven industry, which is still in the production capacity release cycle. Since 2022, the heat of investment and expansion in the nonwoven industry has continued to drop, and some enterprises have cancelled or postponed the capacity investment plan determined in 2022. According to the estimation of the Association, in 2022, the investment in fixed assets of enterprises in China's nonwoven industry will decrease by about 10% year on year.

In recent years, high-end, intelligent and green have become the main direction of new project investment in the industry. In 2022, key enterprises in the industry will continue to make efforts in building differentiated competitive advantages, and the investment in complete equipment projects such as high-speed spinning and melting composite production line, two-component spunbonded nonwoven production line, wood pulp composite spunlaced nonwoven production line will remain active; High quality personal care products, high-end geosynthetics, high-performance filter materials and safety protection industry chain are also the focus of industry investment.

As for the investment plan in 2023, the association survey shows that the investment willingness of sample enterprises has generally weakened, and about 60% of enterprises have no new project investment plan in 2023; However, among the sample enterprises with investment intentions, the proportion of investment in the upgrading and transformation of existing equipment, plant construction, intelligent and green transformation reached 66.2%, which was further improved compared with 2021, and the high-quality investment of industry enterprises continued to increase.

4、 The growth rate of import and export declined, and the prices of major export products rose

（1） Export situation

According to Chinese customs data, the export volume of China's industrial textile industry (customs 8-digit HS code statistics) in 2022 was US $44.15 billion, down 15.9% year on year due to the base effect, but the overall export scale still maintained a steady growth compared with that before the epidemic, and the average annual growth rate of the industry's export volume since 2019 was 17.3%.

From the perspective of export value, the "camping economy" growing against the trend under the epidemic situation has stimulated the export of industry related products. Industrial coated fabrics and felt/tents are the top two export products in the industry at present. In 2022, the export value will reach 4.99 billion US dollars and 4.43 billion US dollars, with year-on-year growth of 16.7% and 0.9% respectively; The export of masks continued to weaken, with an export volume of 3.45 billion US dollars, down 73.4% year on year; The market demand for traditional products such as cord (cable) and belt textiles, canvas, synthetic leather and leather base cloth is good, and the export volume reached US $3.29 billion, US $3.02 billion and US $2.51 billion respectively, up 7.9%, 21.6% and 7.1% year on year respectively.

The export of nonwovens and related products shows different trends due to the changes in demand in the application fields. In 2022, China will export 1.208 million tons of nonwoven coiled materials, worth 3.99 billion US dollars, down 11.9% and 12.1% year on year respectively, and its exports to Vietnam, South Korea, the United States and other major exporting countries will decline by more than 10%; The overseas market has a strong demand for disposable sanitary products, with the export volume reaching US $3 billion, up 19% year on year, of which the export volume to Russia doubled year on year; The export value of cotton wool, gauze and bandages was 1.1 billion US dollars, up 11.7% year on year; The export of nonwoven protective clothing (including medical protective clothing) was 1.08 billion US dollars, down 50.3% year on year; The export of wet wipes was US $670 million, up 6.7% year on year.

From the perspective of export prices, the export prices of major products in the industry have increased to varying degrees. Among them, the average export price of industrial coated fabrics and nonwoven coiled materials is basically the same as that in 2021. The average export price of felt/tent has increased significantly, 11.5% year-on-year. The average export prices of masks, cord (cable) belt textiles, canvas, and disposable sanitary products have increased by 6%, 3%, 3.2%, and 5.9% year-on-year respectively; The average export prices of nonwoven protective clothing (including medical protective clothing) and medical dressings fell significantly, down 16.8% and 11.2% respectively year on year.

China's industrial textile industry and export of major products in 2022

Source: According to Chinese customs data

　　 （2） Imports

According to Chinese customs data, in 2022, the import volume of China's industrial textile industry (customs 8-digit HS code statistics) will be 6.13 billion US dollars, down 15.9% year on year.

In 2022, China's import demand for major products will generally weaken. Among them, the import demand of nonwovens has declined continuously since 2020, with the import volume of 920 million US dollars, down 13.1% year on year, and the import volume down 24.0% year on year; The import volume of traditional products such as industrial glass fiber products and industrial coated fabrics was $730 million and $670 million respectively, down 13.1% and 3.6% year on year respectively; In recent years, as the competitiveness of domestic sanitary textile enterprises continues to improve and consumers' recognition of domestic brands further improves, China's import demand for disposable sanitary products continues to decline, and the import volume will decline by 32.6% in 2022; The import and export trade of textiles for structural reinforcement has been in deficit, and the import demand is still urgent. In 2022, the import volume will be 640 million US dollars, an increase of 8.1% year on year.

China's industrial textile industry and import of major products in 2022

Source: According to Chinese customs data

　　 2　 Development prospect of industrial textile industry in 2023

2023 is the first year to comprehensively implement the spirit of the 20th CPC National Congress and the key year to implement the 14th Five Year Plan. At present, the spread of unilateralism and protectionism, high inflation and geopolitical games have made the world economic recovery face greater constraints; The foundation of domestic economic recovery is not yet solid, and it still faces the triple pressure of "demand contraction, supply shock, and weakening expectations".

Looking forward to 2023, the external environment is still severe and complex, but the fundamentals of China's long-term economic growth have not changed, and the economic operation throughout the year is expected to pick up on the whole. Optimizing epidemic prevention and control measures, stock policy and incremental policy will have a significant positive impact on the smooth operation of the industrial textile industry. At the micro level, the confidence index of industry enterprises for future development has also increased. The research results of the Association on key fields show that enterprises in the fields of geotextiles and construction textiles, textiles for transportation, and textiles for safety and protection are more optimistic about future development; Enterprises in the fields of thread and tape, interlining, medical and sanitary textiles are more cautious in predicting the development situation.

It should be noted that since the outbreak of the epidemic, China's industrial textile industry has experienced rapid growth, downward adjustment, gradual stabilization and other stages. During this period, the industry has accelerated its reshuffle, and "integration" and "departure" are in parallel. As the pattern of business differentiation continues to deepen in recent years, the industry may usher in a new round of integration in 2023.

It is predicted that in 2023, the production and sales of China's industrial textile industry will recover to a moderate growth rate of about 5%, and the profitability will be improved; The focus of fixed asset investment in the industry will shift to equipment upgrading, intelligent transformation and green manufacturing; Industry exports are expected to recover.