2011, a Hard Year For Textile Industry

It is predicted that the textile industry pattern will have important changes at home in 2011, and some factories that do not have enough financial strength may face bankrupt. The cotton production in 2010 was basically the same as it in 2009, and did not seriously shrink. However, the weak demand for the cotton in 2011 may very possibly lead to overstock. Under the global inflation, there is little space for the cotton price to drop down; the textile manufacturers will still face the high-cost pressure.

According to preliminary estimates, the production value of beyond-scale manufacturers may have broken 4,000 billion Yuan; the export volume may surpass 200 billion dollars; the profit is hopefully to break 200 billion Yuan and increase 40%.

Textile manufacturers had considerable high profits in 2010. However, in the meantime, 2011 will be a severe year for Chinese textile manufacturers. Here are the prediction on their current situation and future.

First, the price of the raw material is increasing, and the cultivating areas and production of cotton are shrinking year by year all over the world. These lead to the short supply. At the same time, the excess liquidity in U.S. rises the futures price of bulk stock like cottons. The cost of textile material increased 30% compared with last year. Among these, the cost of upstream materials like cotton was more than double the highest of last year. This huge increase hit a new high in 15 years.

Second, the labor cost had promoted. The salary and welfare’s increasing rate of textile industry was generally above 10%. In Yangtze River Delta and Pearl River Delta, the salary increasing rate was as high as 20%. In 2009, the average salary of our country’s manufacturing industry was 56 thousand Yuan and the textile industry was 31 thousand Yuan. This caused a one-way transfer of the labor. An era that put low cost as its core competence is coming to an end.

Third, the promotion of consuming ability brings further request for the textile quality. Textiles are important component that provide basic products for industries like new energy, environment protection, and bio-medicine. Energy saving and emission reduction are both important problems that textile industry faces.