Consumption, export and investment! The “troika” that drives China’s economic growth seems to have failed recently!
In the past, to a large extent, economic experts would determine the quality of the economy by the amount of consumption, investment and exports. However, in the first quarter of this year, the domestic COVID-19 outbreak combined with the Spring Festival work stoppage, almost all three major categories of economic activities came to a halt!
The total domestic retail sales of consumer goods fell by 20% year-on-year from January to February this year. In this case, the entire market lacks consumer activities, companies lack capital flows, and the entire environment is shrouded in a kind of “pessimism”!
Some textile friends joked: After finally finishing the first half at home, now we are playing the second half abroad! Not long after I resumed work, I didn’t expect to see this result!
Another textile boss gave the editor a table of market changes since they started work:
Wait on! What is waiting is not orders, but notices from various brands canceling orders from suppliers:
Primark, the largest fashion retailer in the UK market, canceled all orders;
Arcadia Group, the parent company of Top Shop Freezing payments to suppliers;
Peacocks cancels all orders before June 20;
New Look halts all production;
Debenhams delays payment for one month;
Fossil cancels orders, hitting Dongguan companies hard;
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A single move affects the whole body! In addition, due to the impact of the coronavirus, the number of retail store closures in the United States has continued to increase, and market consumption has been suspended, which has made it difficult to carry out manufacturing activities. The textile boss said frankly: It feels like “winter has entered overnight”!
Fermentation of orders is cancelled, and the printing and dyeing process is under pressure!
How “deserted” the fabric market is today seems to be confirmed by the dyeing factories.
As early as mid-to-late February, the domestic epidemic was raging, and textile bosses extended the start of work by one month. After that, the dyeing factory ushered in a short-lived “Little Indian Spring”, and phenomena such as liquidation, jamming, and queuing occurred from time to time, and the order delivery period even exceeded 20 days. However, with the completion of orders from the year before and insufficient follow-up of new orders, coupled with the arrival of workers one after another, the dyeing factory operation has increased to about 90%. The pressure of tight market supply and demand has eased, and the delivery time has been significantly shortened, which is almost ugly. To the phenomenon of liquidation and queuing up.
Currently, Mr. Chen, a trader, said that he went to the dyeing factory and found that 6 months ago There are no orders from a certain big sports brand, but in previous years we would receive more or less printing and dyeing orders for the brand’s knitted fabrics. “Now I feel a little panicked. I still have 70,000 meters of orders on hand that I am rushing to make. They should be shipped in the next few days, but I don’t know where to find the next orders, and now I don’t dare to accept some orders. “Mr. Chen said.
It is reported that the cancellation of orders from the fabric trade has been gradually transferred to weaving factories and printing and dyeing factories. Some salesmen from printing and dyeing factories said that orders were temporarily suspended or were hurriedly stopped after being pulled. The order volume is not large, accounting for about 30% of the total order volume. “Currently, the work in the dyeing factory is less than before, and the orders are expected to decrease one after another.”
These days, taking orders has become a “big gamble”!
Recently, many textile bosses engaged in foreign trade said that they are not afraid of not having orders, but they are afraid that they have finally received the order and have already arranged production on the machine but were temporarily Notice, the order has been cancelled!
“Not long after a friend of mine returned to work, he received an order for one million meters. Although the profit was very low, it would still be a good income if all the money was paid back. . But when he received a notice of sudden cancellation of the order a few days ago, he could only stop production in a hurry. However, the raw materials purchased for the order will probably be lost!” Trader Mr. Yang said.
The overseas epidemic suddenly got out of control, and the economy began to shut down. Less than a month after many foreign trade companies resumed production, they were brought back to their original shape by the overseas epidemic.
The COVID-19 epidemic is currently spreading around the world, with more than 160 countries and There are confirmed cases in the area. As of March 25, 2020, the number of confirmed cases worldwide has exceeded 520,000, and the number of deaths has exceeded 23,000. The situation is very serious.
Production reduction and holidays may become the “mainstream” of the market in April!
No matter whether orders are canceled or reduced, life for these companies is relatively difficult, and most of them are labor-intensive.In the �� industry, reducing labor costs is now a general trend, and many companies are forced to take “holidays” in order to reduce operating costs. As for when the holiday will last, it may be two to three months or longer. It all depends on the effectiveness of global epidemic prevention and control and the degree of economic recovery.
At present, market participants are generally concerned about:
1. When will the global COVID-19 epidemic end? This will play a decisive role in whether their foreign trade business can continue in the first half of the year;
2. Is the crude oil price war between Saudi Arabia and Russia a conspiracy or a conspiracy? In any case, the decline in the price of textile raw materials has put some pressure on the raw materials and finished products of downstream production enterprises, further diluting profit margins;
3. Subsequent external market estimates There will be a wave of holiday operations. Whether it is a temporary farewell or a permanent exit from the stage, different operations will have completely different outcomes for the market.
In any case, the current market focus is still on the development of the global new crown epidemic. Every textile boss hopes that this “black swan” will fly away as soon as possible and everything will return to normal! </p
