Textile Industry: Trend Of Major Global Macroeconomic Indicators

In the first half of 2024, the global economic recovery is better than expected, and trade shows signs of recovery, supported by factors such as declining inflation levels in developed economies in the United States and Europe, and overall improvement in household consumption. In the first quarter, the World Trade in Goods Barometer Index was 100.6, up 9.4 percentage points over the same period of the previous year. With the decline of the trade blocking effect of the Red Sea crisis, the pressure on the global supply chain tends to ease, and the steady recovery of the manufacturing industry forms a good support for the improvement of the supply side. Before June, J P. Morgan Manufacturing Purchasing Manager Index (PMI) is in the expansion range. However, influenced by factors such as the slowing down of inflation in service owner led economies such as the United States and Europe, the slowing down of consumption and investment growth in the environment of high interest rates and high debt, the escalation of geopolitical conflicts, and the frequent occurrence of international trade frictions, there were signs of weakness at both ends of global supply and demand in the second half of the year. In July, the global manufacturing PMI was 49.7, ending the continuous expansion trend in the first half of the year. The indexes of major economies in the United States, Japan and the euro area were all in a tight range; In June, the OECD consumer confidence index was 98.9, the lowest since this year.

Figure 1: Trends of major global macroeconomic indicators

Data source: IHS Markit, WTO, OECD

Since this year, the implementation of national support policies in areas such as expanding domestic demand, preventing risks, and benefiting people's livelihood has been accelerated. In the first half of the year, China's macro-economy has effectively withstood the risk tests such as the complex and severe external environment, and the deepening of domestic structural adjustment. The overall economic operation is stable and progress has been made in stability. Statistics show that in the first half of the year, China's GDP grew by 5% year on year, ranking first in the world; Over the same period, the industrial added value, total exports of goods (denominated in US dollars) and completed investment in fixed assets (excluding farmers) of enterprises above designated size increased by 6%, 3.6% and 3.9% respectively year on year, with the growth rate rising by 2.2, 7.1 and 0.1 percentage points compared with the same period last year. However, in a complex situation, there are still difficulties such as insufficient domestic market demand and high pressure on enterprises to operate. In the first half of the year, China's total retail sales of consumer goods increased by 3.7% year on year, 4.5 percentage points lower than the same period last year; The total profit of enterprises above designated size only increased by 3.5% from the low base of the previous year. Affected by weak market demand, China's manufacturing PMI was 49.4 in July, which has been in the contraction range since May.

Figure 2: Change of year-on-year GDP growth in China

Data source: National Bureau of Statistics

Figure 3: Trends of major macroeconomic indicators in China

Data source: National Bureau of Statistics, China Customs

Under the macro background of sustained recovery of the global economy and overall stability of the domestic economy, the economic operation of the textile industry is under pressure, and most indicators have achieved good growth on the basis of the lower base of the previous year. The supply side recovery is more obvious, the upstream of the industrial chain maintains a high startup level, the industry production growth is relatively stable, the benefit scale is significantly increased, and investment confidence has recovered. The recovery of the demand side is relatively poor. The export scale of the industry has only increased slightly, and the growth rate of domestic sales has dropped and gradually declined compared with the same period last year. At the end of the second quarter, the textile industry was in the off-season, and the inventory level of most products increased. At present, the orders for autumn and winter products have increased, and the circulation of the market has been boosted month on month.

(Source: China Textile Industry Economic Research Institute)