In the first half of 2010, the printing and dyeing industry experienced a weak recovery in investment. From January to May, actual investment in the sector rose by just 0.21% year-on-year, with the growth rate dropping by 1.85 percentage points compared to the previous year. This was significantly lower than the growth rate of the broader textile industry, which saw a 19.66 percentage point difference. The slow recovery is attributed to ongoing uncertainties in the global market, rising domestic production costs, and a lack of confidence among industry players regarding future prospects.
Production cost pressures have continued to mount. Raw material and fuel prices have surged since the start of the year. According to data from the China Textile Industry Association Statistics Center, coal prices for printing and dyeing companies reached an average of 756.9 yuan per ton in the first four months, up 28% year-on-year. Steam prices averaged 153.24 yuan per ton, a 14.47% increase. Electricity, water, and dyeing materials also saw significant price hikes, with electricity costing 0.68 yuan per kWh, up 4.9%, and water priced at 2.17 yuan per ton, up 7.2%. Labor costs increased by 10% to 20%, further straining company budgets. Meanwhile, processing fees for bleached, dyed, and printed cloth declined by 1.36%, 8.58%, and 8.57% respectively, putting more pressure on profit margins.
In response to these challenges, many printing and dyeing companies have accelerated structural adjustments. Guided by national policies such as the "Regulations on Textile Industry Adjustment and Revitalization," enterprises have focused on optimizing operations, improving efficiency, and transitioning toward more sustainable models. From January to May, large-scale printing and dyeing enterprises reported a 3.94% cost-profit margin, up 0.76 percentage points year-on-year. The proportion of three fees dropped by 0.30 percentage points, while labor productivity rose by 26,600 yuan per person. Per capita profits increased by 2,264 yuan, showing improved management and operational performance. Inventory turnover rates climbed by 2.10 times, and asset turnover ratios improved, indicating better responsiveness and efficiency in the market.
Looking ahead, both international and domestic conditions present complex challenges. Globally, unemployment remains high in the U.S., Europe, and Japan, with figures at 9.7%, 5.2%, and 10.0% respectively in May. Consumer demand has not fully recovered, and export growth is largely driven by restocking rather than strong demand. European economies face significant risks, with slowing inventory and order growth, weakened consolidation efforts, and the ongoing debt crisis causing reduced spending and consumption. The euro's depreciation also threatens Chinese exports by increasing the value of the RMB.
Domestically, rising raw material and labor costs are expected to continue, squeezing corporate profits. Export growth faces uncertainty due to increased competition and shifting trade dynamics. While China’s macroeconomic stimulus policies are gradually being phased out, economic growth shows signs of correction, and policy withdrawal may slow in the second half of the year. The government is likely to adopt a “stabilize fiscal resources, tighten monetary policy†approach, maintaining fiscal support while tightening credit conditions.
Despite these challenges, the printing and dyeing industry is expected to maintain relatively strong growth in the second half of 2010. Output from large-scale enterprises is projected to rise by 10%, with gross industrial output growing by 17% and profits increasing by 35%. However, export growth will face greater difficulties, and the pace of recovery is expected to slow. Annual export growth is anticipated to remain between 10% and 12%. The industry must adapt to changing global and domestic conditions, focusing on technological innovation, efficiency improvements, and sustainable development to achieve long-term success.
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