2020 Analysis Of The Economic Operation Of Wuxi Textile Industry In The First Quarter

I. General Situation:

The first quarter of 2020 was a very difficult time in the history of China. In January, the outbreak of the new crown pneumonia in Wuhan broke out. In order to prevent the spread of the epidemic, in January 24th, the Central Committee of the Communist Party of China announced that Wuhan was closing the city, and then the Spring Festival holiday was extended. Under the leadership of the municipal Party committee and the municipal government, despite the impact of the sudden outbreak, the epidemic situation is well controlled. (a total of 55 new crown pneumonia patients were diagnosed in the city from February 16th to the end of the year, and no new cases were added thereafter). And by March 15th, all the in-patients were cured and discharged without any death. The textile enterprises in our city began to apply for business in February 10th and submitted to the higher authorities for approval before resuming work and resuming production. By the end of February, all enterprises above Designated Size had basically fully resumed production. However, due to the large number of foreign employees in Wuxi, the initial rate of return to production is only about 30%, so the capacity utilization rate is low, and the transportation and logistics are not smooth, the market consumption is stopped, the difficulties between the upstream and downstream businesses are difficult to connect, resulting in a sharp decline in the output of major products in 1-2 months, and operating income fell by 37.38% over the same period last year. Under such a severe situation, some enterprises have made contributions to the epidemic by taking timely production of protective clothing and masks and other anti epidemic materials; adjusting production arrangements for internal and foreign trade products, will prioritize foreign trade orders, speed up production and advance shipment, adjust product mix, speed up the commissioning of high value-added products, strengthen internal management, and reduce production costs. Grid control cash flow and other measures, do everything possible to reduce the losses caused by the epidemic, stabilize the production of enterprises, and ensure the survival and development of enterprises.

In mid March, the epidemic broke out in countries such as Europe and the United States. Many customers demanded withdrawal, delayed delivery and deferred payment. Some customers mentioned that all the orders that had been completed were suspended, the production was suspended, and the arrangements were not put into production. The textile enterprises in our city, which were mainly foreign trade, brought another wave of serious impact. So far, some garment enterprises have laid off 50%, and some enterprises only start three days a week. At present, the global epidemic is continuing to spread and there is no definite conclusion on when to ease it. Although some western countries are considering the gradual restoration of order and the need to resume work and resume production in stages, there are still many uncertainties and the situation is still grim. Under such a severe situation, the economic performance of our textile industry in the first quarter was very unsatisfactory, and the output of various major products decreased significantly compared with the same period last year. The main economic indicators completed a significant decline compared with the same period last year, as shown in the table below.

Completion of major economic indicators of Wuxi textile industry in 1-3 2020

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Two, operation analysis:

1, the completion of major economic indicators increased significantly in March than in 1-2 months, the year-on-year decline has narrowed significantly.

The total operating income in the 1-2 months was only 18 billion 592 million yuan, down 37.38% from the same period last year. In the month of March, the total business revenue reached 18 billion 598 million yuan, exceeding the total sum of 1-2 months. In 1-3 months, the total operating income was 37 billion 190 million yuan, down 24.87% from the same period last year, a decrease of 12.51 percentage points lower than that in 1-2 months.

The total industry realized a profit of 62 million yuan in 1-2 months, down 90.80% compared with the same period last year. In March, the whole industry realized a profit of 298 million yuan, which was 480.65% in 1-2 months. The total profit realized in 1-3 months was 360 million yuan, down 76.68% from the same period last year, a decrease of 14.12 percentage points lower than that in 1-2 months.

2, the output of main products in 1-3 months is still larger than that of the same period last year. Please refer to the table below.

Summary of output of main products of Wuxi textile industry in 1-3 2020

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3, analysis of the economic performance of textile sub sectors in the first quarter.

The clothing industry index is the smallest. Chemical fiber industry has been losing money in the whole industry, with a deficit of up to 62.24%. Please refer to the table below.

2020 1 to March Wuxi textile sub sectors

Completion of main economic indicators.

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Three, several suggestions for enterprises to deal with in severe situation:

1, communicate with all parties in a timely manner: (1) communicate with the local government in a timely manner to reflect the difficulties and aspirations of the local government in time. The government is required to give relief and help in a timely manner and timely implement the relevant relief policies promulgated by governments at all levels. (2) communicate with customers and cooperate with each other to minimize the losses caused by the epidemic. (3) to communicate more with employees, to boost confidence, to overcome difficulties and tide over difficulties, to maintain enterprise stability, and lay a solid foundation for the normal operation of enterprises after the situation improves.

2, adjust product mix to meet market demand and adopt diversified business models, such as online sales, remote negotiation, etc., to vigorously expand domestic and foreign markets. In particular, we should pay attention to the development of domestic demand market.

3, turn danger into opportunity, enhance endogenous motivation, accelerate intelligent transformation and industrial upgrading, strengthen product development, upgrade product grades, and create conditions for high-quality development.

4, do everything possible to reduce production costs, do well in cash flow risk management and control, ensure survival and seek development.

5, under the influence of the epidemic, the global economic downturn has come to light, and the currencies of many countries have been greatly depreciated. In order to avoid the risks brought about by the exchange rate and capital withdrawal, we must make careful orders and timely collect foreign exchange.

Four, the government's recommendations:

1, since the outbreak of the outbreak, governments at all levels to alleviate the impact of the epidemic on the economy have successively introduced a series of policies and measures, such as reducing taxes and lowering fees, reducing enterprise costs, solving financing difficulties, raising funds, helping enterprises to stabilize their posts, relieving employees' Social Security, and alleviating the pressure of cash flow of enterprises. It is suggested that governments at all levels should clearly link cadres to the enterprises according to the jurisdiction of enterprises, publicize the relief policies to enterprises, take the initiative to understand the implementation of various policies and the difficulties faced by enterprises, help enterprises solve problems and solve problems, and include the achievements of this work and the evaluation of cadres of relevant enterprises in cadre assessment.

2, at present, the price of oil in the international market has plummeted, and the cost of energy should drop accordingly, so as to lighten the burden of enterprises, but so far the electricity price has dropped by only 5%, while the prices of natural gas, steam and drainage (sewage) have remained unchanged. In the past, the government adopted the original system to assess the indicators and methods of enterprises and departments (such as Gas Co, thermal power plants, banks, taxation, etc.), so that these enterprises and units could not implement the rescue policy if they were afraid of affecting the completion of their targets and their own interests. It is hoped that the price of energy will be synchronized with the price of oil.

3, although the textile industry is a traditional industry, it is an important livelihood industry. It plays an important role in arranging employment and social stability. It is also the main source of China's foreign exchange surplus and contributes greatly to the national finance. Industrial textiles (high tech Textiles) are widely used in medical and health, food and medicine, new energy batteries, aerospace and other fields. Therefore, attention should be paid to the transformation and upgrading of the industry and the development of high quality. It is proposed to increase support for technological transformation in the transformation and upgrading of enterprises, such as the establishment of special discount loans, exemption from import equipment tariffs, value-added tax and so on.

4, a considerable part of the textile industry is consumer goods, and the brand effect of the consumer goods market is very prominent. It is suggested that the national well-known trademark enterprises and famous brand enterprises be given the same preferential tax treatment for high-tech enterprises, so as to encourage enterprises to invest in brands, to provide brand enterprises with industrial upgrading, high quality development, expand market share, and further expand, make better and stronger. Strong support.