Comments on the export data of the textile and garment industry in April 2023: the growth rate of textile and garment exports fell in April, and short-term pressure still exists

In April, the national textile and apparel exports increased by 8.8% year-on-year, and the growth rate dropped month-on-month. In April, my country's textile and apparel exports amounted to US$25.66 billion, +8.8% year-on-year, and the growth rate dropped significantly month-on-month (+19.7% year-on-year in March). Among them, the export value of textiles in April was US$12.74 billion, +3.9% year-on-year (+9.1% year-on-year in March); the export value of clothing in April was US$12.92 billion, +14.0% year-on-year (+31.9% year-on-year in March).

From January to April, the cumulative export of textiles and clothing nationwide was -3.1% year-on-year, and the decline continued to narrow. From January to April, my country's total exports of textiles and clothing amounted to 92.88 billion US dollars, a year-on-year -3.1%, and the decline was further narrowed from the previous month (-6.7% year-on-year in March). Among them, the cumulative export value of textiles from January to April was 44.81 billion US dollars, a year-on-year -8.0%, and the decline narrowed from the previous month (the cumulative year-on-year increase from January to March was -12.1%); the cumulative export value of clothing from January to April was 48.08 billion US dollars, a year-on-year +2.5%, the growth rate turned from negative to positive (accumulated year-on-year -1.3% from January to March).

The short-term external demand may continue to weaken, and the pressure of export orders in Q2 still exists. Considering that it will take about a quarter for overseas brands to destock, the inflection point of the fundamentals of the manufacturing side is expected to arrive in Q3. On the demand side, the problem of high overseas inflation still exists, and the consumer demand of residents has been suppressed; in March, the U.S. commodity consumption has turned from positive to negative, further indicating that the consumer demand of residents has shown a weak trend in the context of overseas economic cooling. In terms of inventory, Adidas, Puma, Columbia, and Skechers recently disclosed their FY2023Q1 financial reports. As of March 31, 2023, the inventory of the four brands was -5%/-5%/-7%/-17% month-on-month. Positive growth, the current inventory is relatively high.

We believe that the destocking of overseas brands is expected to take about a quarter. Q2 orders are still under great pressure, and the inflection point of manufacturing fundamentals is expected to arrive in Q3.