Analysis of the Operational Situation of Textile Industry in 2011

The high prosperity of the textile industry in 2010 was mainly due to the strong demand and the positive effect of rising prices in the early stage of inflation. However, after experiencing the crazy cotton price, the prosperity index of the textile industry declined, which widened the gap with the manufacturing industry. This also shows that the pressure of rising costs has not been fully transmitted to downstream companies.

From 2010 to the first quarter of 2011, the textile industry maintained a good momentum of operation. The growth rate of production and sales increased significantly. Demand from the domestic market was strong. The prices of downstream yarns and cloths rose simultaneously, making profitability even stronger. The export of home textile garments was in a good position.

After experiencing the decline in the fourth quarter of 2010 and the first quarter of 2011, the prosperity index rebounded.

However, starting from the second quarter of 2011, as the high cotton prices fell, the prices of cotton yarn and cotton cloth also fell sharply and market sentiment turned pessimistic. Due to the need for cotton spinning and cotton production and some companies’ deviations from the situation, some companies have large stocks of cotton fabrics, and some of the yarns and cloths have caused sluggish sales, resulting in large stocks. In the market downturn, companies have turned losses from previous profits into losses. Even "This year will spit money back last year".

In the third quarter, China's textile industry business climate index was 128.9, which was in line with the same period of last year. In the fourth quarter, due to the global economic weakness, the textile industry entered into a cold winter and it is time for the economy to recover.

From 2010 to 2011, from the perspective of the textile industry as a whole, the overall operation was barely stable, and the prosperity index continued to retrace, but it was consistently lower than the average national manufacturing economy.