In the first half of this year, China's textile economy maintained slow but steady growth, according to analysts and experts attending the conference held by China National Textile and Apparel Council on analyzing the operation of textile economy in the first half of 2015.

In the first-half year, both quality and efficiency indicators of the industry maintained steady growth; the confidence of investors continued to recover; the restructuring campaign made further progress; domestic demand increased steadily while decline of exports narrowed; however, scale of export dropped due to slower growth of production.

Better prosperity index

The prosperity index of China's textile industry remained within the growth range in the second quarter of this year and it improved compared to the previous quarter. All sub-indices including production index, order index, selling price, raw material purchasing price, inventory of finished products, inventory of raw material and labor index are better than in the first quarter.

Industrial value added grew steadily

In the first half of this year, China's economy grew in a “slow-but-stable" manner. The growth of industrial value added of the textile industry also slowed down to 6.8%, slightly lower than the growth rate of GDP in the same period, far lower than that in previous years. But it is higher than that in the first quarter of this year and presented a month-by-month picking-up trend in the second quarter.

Increasing investments and number of newly-commenced projects

In January-June of 2015, China's textile industry completed a fixed-assets investment of CNY 524.53 billon, up 15.41% year-on-year, improving 2.04 percentage points compared to 2014, almost equal to that in the first quarter of 2014. The number of newly-commenced projects increased by 11.02%, 11.54 percentage points higher than in 2014 and 0.66 points higher than in the first quarter of 2015.

The investment of the eastern and central areas covered increasing share in the total compared with same period of last year, while the investment of western areas covered less share.

Dropping scale of export and negative growth in the 2nd quarter

In the first six months of this year, China's exports of textiles and garment totaled US$ 131.86 billion, down 2.91% from a year earlier; the growth rate was 7.07 percentage points slower than in same period of last year, but the decline narrowed compared to January-May period; the average export price dropped by 1.45% and the export quantity dropped 1.48%.

The export of textiles amounted to US$ 55.65 billion, down 0.55% from a year earlier, while the export of garment stood at near US$ 76.21 billion, down 4.56%.

Slightly higher demand for garment and increased sales of department stores

In the first half of 2015, China's retail sales of social commodities grew 10.4% year-on-year to CNY 14.16 trillion; the retail sales of consumer goods by commercial enterprises above designated size (annual revenues more than CNY 20 million) amounted to CNY 6.63 trillion, up 7.8% year-on-year; and the retail sales of clothing by above-scale commercial enterprises amounted to CNY 637.5 billion, up 10.7% year-on-year, slightly higher than the growth of retail sales of social commodities.

In the same period, the retail sales of clothing commodities of top 100 large-sized retailers increased 3.7% year-on-year, improving 2.5 percentage points from the same period of last year, while the retail quantity rose 7.2%, 9 percentage points higher than that in the same period of last year.

Improved profit-earning ability

The total profits of above-scale enterprises further expanded at a steady growth rate. In January-May of 2015, China's textile industry realized prime business income of more than CNY 2.6 trillion, up 5.27% year-on-year; total profits of about CNY 129.92 billion, up 9.81%. The profit rate stood at 4.97%, improving 0.21 percentage point year-on-year. The share of period expenses (marketing, financial and management expenses) in total costs dropped by 0.01 percentage point from a year earlier; and the turnover of finished products accelerated by 2.72%.

In term of total profits, the home-textiles and technical textiles sectors saw fast growth and the chemical fiber sector saw sharp growth, while the textile machinery sector saw negative growth.

Slowly recovered performance of listed companies

Among all listed companies, the performance of chemical fiber companies showed noticeable recovery; performance of garment and home-textiles companies varied; while that of textile companies picked up slowly.

68 listed companies have released their performance report of the first-half year. 42 (61.76%) reported growth in net profit, 21 (30.88%) reported loss and 3 kept flat.

Among 29 good performers in prime business, 11 are chemical fiber companies, accounting for 73.33% of the companies that have announced performance projections; 13 are garment and home-textiles producers, accounting for 48.15%; while only 5 are textile companies, making up 22.72%.

On forecasting future developing trend, experts deem that both domestic and overseas markets can support the steady operation of the textile industry, but various uncertainties are worth to be noticed. It is anticipated that the decline of export will be further narrowed and the whole-year figure of export will be the same as in last year; the demand for clothing commodities further expanded and online sales will remain on the fast-growing track; meanwhile, the growth in industrial value added, prime business revenue and total profits will keep at the same level as in the first-half year.

Source: China Textile Leader Express