A three-minute guide to the macroeconomic environment of the textile industry

The sluggish recovery in the world economy has continued since 2023. The negative impact of interest rate hikes on growth in developed economies continues to emerge, with uncertainties such as banking sector turbulence and stubborn inflation increasing the risk of recession, damage to balance sheets of residents, businesses and other sectors, and unabated demand-side pressures since the second quarter. The OECD consumer confidence index stood at 98.2, rebounding to its highest level in 15 months, but still in contraction territory for the 21st consecutive month. From the supply side, the global manufacturing boom was in contraction for nine consecutive months, with the J.P. Morgan Manufacturing Purchasing Managers' Index (PMI) remaining at 49.6 from March to May, with the new export orders index at 47.3, down to a nine-month low; among developed countries on record, only Japan's PMI was in expansionary territory in May. The index stood at 95.6, a slight recovery of 3.4 percentage points from the first quarter, still below the 100 trend level. Global inflation remained at a high level, with the IMF Commodity Price Index at 158.3 in May, a sharp drop of 67.8 percentage points from a year earlier and basically back to the same level as in 2021.

China's macroeconomic recovery in general continued, production and domestic and foreign sales growth were slightly faster than in the first quarter, profits fell slightly narrower than in the first quarter, but compared with the same period last year than, only domestic sales indicators growth rate, the other major operating indicators have slowed down. Statistics show that in January to April, the value added of industrial enterprises above national scale, total retail sales of consumer goods, total exports (in U.S. dollars) grew by 3.6%, 8.5%, 2.5%, respectively, compared with the first quarter growth rate of 0.6, 2.7, 2 percentage points. Since the second quarter, the problem of insufficient orders in domestic and international markets has been highlighted, the lack of improvement in corporate profits and sluggish investment intentions, with total profits of enterprises above the scale in January to April decreasing by 20.6% year-on-year, only narrowing by 0.8 percentage points compared to the first quarter, and fixed asset investment completion (excluding farmers) increasing by 4.7% year-on-year, down by 0.4 percentage points compared to the first quarter. China's manufacturing boom fell into contraction territory for the second consecutive month, with the manufacturing purchasing managers' index (PMI) at 48.8% in May, the lowest level since this year, of which the number of enterprises reflecting "insufficient market demand" accounted for nearly 60%.