Price increases, profit decline, textile and apparel companies still suffering cost

Due to the rebound in international market demand, China's textile and garment export enterprises have successfully achieved price adjustments. From January to October this year, the export amount has exceeded the amount of the previous year, and it is expected that the export value this year will reach 200 billion US dollars.

"There are too many orders to finish," says Song Guangfa, general manager of Nanchang Henglitai Garments Co., Ltd. Middle-to-high fashion men's shirts and casual wear are the main products of Shanghai Three International Garment Co., Ltd. The main markets are in Europe and South America. The company’s foreign trade business department told reporters: “The export price of garments this year has been raised by about 20%. There are still a lot of orders. In previous years, the export of clothing was the buyer's market and this year became the seller's market."

The Henan Marriott Clothing Import & Export Co., Ltd. in Zhengzhou also introduced that the company’s export clothing prices have also been raised by about 20%, and the export value has increased by about 25%. Driven by price increase and increase in orders, Song Guangfa’s company’s export value this year reached 140 million yuan, a year-on-year increase of 30%.

Wang Qiang, editor-in-chief of First Textile Network, said that in the first few months of this year, the unit price changes of domestic enterprises' knitting and woven garments were not obvious, and the prices in January and March also showed a year-on-year decline. Since May, the unit price of exports has started to climb. In September, the unit price for export was US$3.9/piece (set), an increase of 10.3% year-on-year, and the first-ever double-digit growth for the first time in the year.

Although the substantial increase in prices has boosted the export value of enterprises, but profits have not increased, Song Guangfa said: "Because labor and raw material prices have risen, profits have fallen by 5% year-on-year." According to the statistics of the First Textile Network, this year's textile raw materials Material costs rose by about 30% to 80% year-on-year, of which the main raw materials such as cotton rose by more than double. The labor costs of enterprises have also risen to different extents, and recruitment is difficult to trouble companies. According to reports from enterprises in Jiangsu and Zhejiang provinces, only 70 to 80 percent of factory recruitments last year, and some even less than 50 percent, companies can only significantly increase the salaries of their employees. The wage increase in the Yangtze River Delta and the Pearl River Delta is generally 20% to 40%. In addition, the state will increase energy-saving emission reduction efforts, objectively will increase the cost of corporate environmental protection. The overall increase in costs tests the ability of the textile industry to absorb costs, resulting in a continuous reduction in the export profit margins of enterprises.

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