13 September 2011
Textile and clothing export orders were weaker in August in China, according to a survey with purchasing managers. The strong increase in production costs is further affecting demand from foreign countries, while the domestic market remains very strong, by contrast.
The level in export orders significantly declined in August in China, according to the Purchasing Management Index (PMI) of the China Federation of Logistics & Purchasing.
While the domestic textile and apparel industries should now be busy with producing at full capacity, a slowdown in export growth is expected for the end of the year, as a result.
Until now, textile and clothing exports continued strongly rising in US$ terms, but this was entirely due to a jump in prices, after production costs similarly surged.
Textile exports are one of the most affected activities amid China's industrial sectors.
The domestic market remains relatively strong, by contrast, with a good level in orders, according to the clothing industry.
Clothing retail sales continued rising more than 20% in August, in yuan terms, from the same month a year earlier.
Consumer prices only climbed by 2.9% for clothing and footwear products in August in China, from a year earlier, which means a spectacular growth in volume terms, if these official data are reliable.
The country is still confronted with a sharp increase in labor costs, a rising renminbi and tighter credit conditions.
On the other hand, textile material costs significantly fell in the first part of the year before cotton and polyester prices bottomed out in the recent period.
The growth of production costs was relatively weaker in August, possibly indicating that costs could increase at a slower pace in future months.
China's textile and apparel industry are now shifting to production of higher-priced products, while making new productivity gains, at the same time.
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