Driven by domestic demand, exports remain weak!

Data show that this year's textile, clothing, footwear and hat industry has shown a relatively large recovery.

Retail sales of consumer goods totaled 18.8 trillion yuan in the first five months of this year, up 9.3% year on year, according to the National Bureau of Statistics. Divided by consumption types, the retail sales of commodities in the first five months of this year were 16.8 trillion yuan, an increase of 7.9%. The revenue of catering industry reached 2 trillion yuan, up 22.6 percent.

From the perspective of retail sales of units above the quota, the top three cumulative growth from January to May were gold, silver and jewelry, clothing, shoes and hats, textile and Chinese and Western medicine, with a cumulative growth rate of 19.5%, 14.1% and 12% respectively.

However, it is worth noting that from the demand side, the demand of the textile and garment industry in the first half of the year was mainly driven by domestic demand, and exports were weak.

According to customs data cited by the China Textile Industry Federation, in the first half of this year, the country's textile and garment exports were 142.68 billion US dollars, down 8.3% (down 1.9% in renminbi terms), and 1.6 percentage points higher than the first quarter. Among them, textile exports were 67.7 billion US dollars, a decrease of 10.9% (in RMB terms, a decrease of 4.5%); Garment exports were US $74.98 billion, down 5.9% year-on-year (+ 0.7% year-on-year in RMB terms).

For the weakness of overseas demand, Zheshang Securities analyzed in its research report that overseas inventory clearance continued for nearly 1 year, and the channel pressure has been significantly reduced as of April 2023. From the perspective of retail and wholesale channel inventory in the United States, it peaked in July 2022, and since then brands have begun to clear inventory, although the overall clothing inventory growth rate and terminal retail growth rate in the United States are still not fully matched, but the gap continues to narrow, and the pressure on channel inventory is reducing, from the latest public data (April 2023 data), inventory growth is only 9%.

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