A survey of 199 textile and garment enterprises: Under the coronavirus the main difficulty faced by enterprises!

On April 18, the National Bureau of Statistics released the operation of the national economy in the first quarter of 2022. According to preliminary calculations, China’s GDP in the first quarter of 2022 was 27,017.8 billion yuan, a year-on-year increase of 4.8% at constant prices. The quarterly increase was 1.3%. The overall data indicators are lower than market expectations, which is a portrayal of the actual operation of the current Chinese economy.

Now China is fighting the epidemic fiercely. The tightened epidemic prevention and control measures in various places have had a certain impact on the economy. Various specific measures have also been introduced at the national level to speed up the resumption of work and production and dredging the logistics links. For textile enterprises, how much has the recent epidemic affected the production and operation of enterprises?

Recently, Jiangsu Garment Association has conducted 199 online questionnaires on the impact of the recent epidemic on the production and operation of enterprises, including: 52 key textile enterprises, 143 clothing and apparel enterprises, and 4 textile and clothing equipment enterprises. According to the survey, 25.13% of the production and operation of enterprises “dropped by more than 50%”, 18.09% “dropped by 30-50%”, 32.66% “dropped by 20-30%”, and 22.61% “dropped by less than 20%” %, “no obvious impact” accounted for 1.51%. The epidemic has a great impact on the production and operation of enterprises, which deserves attention and attention.

Under the epidemic, the main difficulties faced by enterprises

The survey shows that among all the options, the top three are: “high production and operation costs” (73.37%), “reduced market orders” (66.83%), and “unable to produce and operate normally” (65.33%). more than half. Others are: “It is difficult to collect accounts receivable”, “The company needs to pay liquidated damages because it cannot perform the transaction contract on time”, “It is more difficult to raise financing” and so on. Specifically:

(1) The cost of production and operation is high, and the enterprise has a heavy burden

Mainly reflected in: the epidemic has led to obstruction of transportation and logistics, raw and auxiliary materials, equipment materials, etc. cannot come in, products cannot go out, freight rates have increased by as much as 20%-30% or more, and the prices of raw and auxiliary materials have also risen significantly; labor costs have been increasing year by year. Rising, social security and other rigid expenses are very large; rent costs are high, many stores are not operating well, or even closed; corporate epidemic prevention costs increase.

(2) Decrease in market orders

Foreign markets: Due to the obstruction of logistics and transportation, the samples and samples delivered to customers cannot be delivered in time, and customers cannot confirm in time, which directly affects the order of large goods. The noodles and accessories could not come in, which caused the order to be interrupted. The goods could not be delivered, and the products were backlogged in the warehouse. Customers were very worried about the delivery time of the orders, and subsequent orders were also affected. Therefore, a large number of foreign customers stopped placing orders and waited and watched. Many orders will be transferred to Southeast Asia and other regions.

Domestic market: Due to the closure and control of the epidemic, orders could not be fulfilled on time, non-local customers could not visit the company normally, business personnel could not carry out sales activities normally, and the loss of customers was serious. In terms of retail, due to irregular closures and controls, shopping malls and stores cannot operate normally, the flow of people in various business districts has plummeted, customers dare not invest easily, and store decoration is hindered. Affected by the epidemic, customers went out for shopping less frequently, wages declined, consumer demand decreased, and the domestic sales market was sluggish. Online sales cannot be delivered on time due to logistics reasons, resulting in a large number of refunds.

(3) Unable to produce and operate normally

During the outbreak of the epidemic, due to the closure and control, employees could not arrive at their posts normally, logistics were not smooth, and there were problems in the transportation of raw and auxiliary materials, finished products, etc., and the production and operation of enterprises were basically at a standstill or semi-stop.

84.92% of the surveyed companies indicated that there is already a great risk in the return of funds

The outbreak of the epidemic has three major impacts on the operating funds of enterprises, mainly in terms of liquidity, financing and debt: 84.92% of enterprises said that operating income has decreased and liquidity is tight. Due to abnormal production and operation of most enterprises, order delivery is delayed, order volume is reduced, online and offline sales are blocked, and there is a great risk of capital return; 20.6% of enterprises cannot repay loans and other debts in time, and the pressure on funds increases; 12.56% of enterprises Short-term financing capacity has declined; 10.05% of enterprises have reduced financing needs; 6.53% of enterprises are facing the risk of being withdrawn or cut off.

Pressure continued unabated in the second quarter

The bad news for textile enterprises is gradually emerging

From the current point of view, the pressure faced by textile enterprises in the second quarter of this year is still unabated compared with the first quarter. Recently, energy prices have soared and food prices have risen sharply. However, the bargaining power of textiles and clothing is relatively weak, and it is difficult to increase. Coupled with the continuing conflict between Russia and Ukraine and the tightening enforcement of the US government’s ban on imports of Xinjiang-related products, the disadvantages for textile enterprises have gradually emerged. The recent multi-point outbreak and spread of the epidemic has made the prevention and control situation in the second and third quarters of 2022 extremely severe, and the impact of “dynamic clearing” on textile enterprises cannot be underestimated.