In the first half of 2023, the global economy maintained low growth under the support of the stable recovery of the service industry, the recovery of the international supply chain and the gradual decline of inflation, but the negative impact of the continuous interest rate hike by the central banks of major economies on the economic recovery continued to appear, the recovery of the consumer side was still weak, and the manufacturing industry and commodity trade were depressed. The global manufacturing sentiment index has been in the contraction range for 11 consecutive months. In July, the J.P.Morgan manufacturing purchasing managers index (PMI) was 48.7, and the new export orders index was only 46.3, both of which fell to a new low this year. Manufacturing PMIs in the US, Germany and Japan are all in tightening territory. The OECD's consumer confidence index recovered to 98.5, but remained below the line of expansion for the 24th month in a row. The World Trade Organization's (WTO) barometer of global trade in goods index, published in May, was 95.6, below the 100 trend level. International commodity prices continued to fall, in July the International Monetary Fund (IMF) primary product price index was 158.7, a sharp drop of 69.7 percentage points over the same period last year.

With the full resumption of normal economic and social operation, China's macro economy has shown a good trend of recovery since this year, and industrial production and domestic sales have achieved a good recovery. Statistics show that in the first half of the year, China's GDP grew by 5.5%, the growth rate rose by 3 percentage points over the same period of last year and in the first quarter of this year, and the economic growth rate was in the forefront of the world; In the same period, the industrial added value of enterprises above designated size and the total retail sales of consumer goods increased by 3.8% and 8.2% respectively, the growth rate increased by 0.4 and 8.9 percentage points over the same period of last year, and increased by 0.8 and 2.4 percentage points over the first quarter. However, since the second quarter, affected by weak external demand and insufficient internal power, China's export situation has been under pressure, and the problems such as slow repair of corporate profits and unstable market expectations have been prominent, and the foundation for sustained economic improvement still needs to be consolidated. In the first half of this year, the country's total merchandise exports (denominated in US dollars) decreased by 3.2% year-on-year, the growth rate decreased by 17.1 percentage points and 1.7 percentage points compared with the same period of last year and the first quarter of this year respectively. The total profits of enterprises above designated size decreased by 16.8% year-on-year, 4.6 percentage points lower than that in the first quarter of this year. Completed investment in fixed assets (excluding rural households) increased by only 3.8% year-on-year, down 2.3 and 1.3 percentage points from the same period last year and the first quarter of this year, respectively. In July, China's manufacturing PMI was 49.3%, still in the contraction range, of which the new export orders index was 46.3%, the fifth consecutive month-on-month decline.

The overall economic operation of the textile industry has recovered, and most of the main indicators are still in the negative growth range, but the trend is differentiated. The domestic sales of the industry still maintained rapid growth, although the production and efficiency indicators showed a negative growth trend, but the decline continued to narrow; The decline in exports has deepened and investment confidence remains subdued. At present, the characteristics of the market off-season are still obvious, the overall order is insufficient and polarized, the sales speed of finished products has slowed down, the inventory is still rising, the opening probability of some links in the industrial chain has been reduced, and the market competition is more fierce.

Looking forward to the whole year, the economic operation of the textile industry is expected to gradually stabilize under the support of the traditional market peak season, but uncertainties still exist. China's macroeconomic fundamentals are good for a long time, and the implementation of a series of policies to expand domestic demand is effective, which is conducive to the domestic sales of the industry to maintain good growth, but due to the consumption resilience to be stable, the domestic sales growth rate has a greater probability of falling. Affected by factors such as sluggish international market demand, high retail inventory, and intensifying competition in the international supply chain, textile industry exports will maintain a negative growth trend. If the peak season of the autumn and winter market can drive orders to improve, the decline in industry production is expected to be further narrowed. Under the background of "wide supply and low demand", the prices of finished products in the textile industry will remain weak, and the pressure on corporate profits is difficult to improve substantively.

(Source: Industrial Economic Research Institute of China Textile Industry Federation)