In the first half of 2022, the global economy was hit by multiple risk factors, including repeated outbreaks of the epidemic, escalation of the situation in Russia and Ukraine, tightening of financial conditions and withdrawal of supportive policies in major economies. The recovery process slowed sharply, inflationary pressure continued to rise, stagflation risks kept building up, and consumer confidence was obviously insufficient. The J.P. Morgan global manufacturing purchasing managers' index (PMI) was 52.2 in June, down 0.1 percentage points from May and at a near 22-month low, with new export orders at 49.5, indicating a continued contraction in demand. The OECD's index of consumer sentiment outside the euro zone fell to a 40-month low of 97.4 in May, marking the 27th consecutive month of contraction. The WTO Barometer for global trade in goods was 99 in the second quarter, up 0.3 percentage points from the first quarter, but it still failed to reverse the trend of contraction below the critical point since the fourth quarter of 2021. The world is in the most serious inflation situation in the past 40 years. The CPI increase in developed economies generally reached over 8%. The IMF primary product Price Index (2016 =100) in May was 226.1, a year-on-year increase of nearly 50%.

Since the second quarter, due to the complex and severe international environment, the impact of the epidemic at home and other factors that exceeded expectations, the downward pressure on China's macroeconomic performance has increased, and a number of economic indicators have weakened significantly. Statistics show that from January to May, the total retail sales of consumer goods decreased by 1.5% year on year, the completed amount of fixed asset investment (excluding rural households) increased by 6.2% year on year, the industrial added value of enterprises above designated size increased by 3.3% year on year, and the total profit increased by 1% year on year, which was 1.3, 0.6, 0.7 and 2.5 percentage points slower than that from January to April respectively. Under the promotion of logistics bottlenecks gradually cleared up, pre-accumulated orders delivered and stable foreign trade policy, export maintained a recovery trend. From January to May, China's total merchandise export (in DOLLAR terms) increased by 13.5% year on year, increasing by 1 percentage point compared with January to April. Since the middle and late may, enterprises have continued to resume work and production and logistics services have been maintained. The initial recovery momentum of the macro economy has led the manufacturing industry to recover to the expansion range. In June, China's manufacturing PMI was 50.2.

Under the situation of frequent epidemic and the arrival of low sales season, the textile industry has entered the bottom range. Except the export, supported by the concentrated delivery of orders in the early stage, the growth rate of other economic indicators has slowed down, and the decline of domestic retail sales and corporate profits has continued to expand. Since June, textile enterprises, industrial clusters and professional trading markets have steadily resumed work and trading. However, due to weak demand and insufficient orders, capacity utilization rate has generally decreased compared with the same period last year, and the dilemma of low profits and high inventory has not been substantially improved. Commodity prices began to decline after the us dollar interest rate rise, and the price of finished products in the textile industry entered a downward channel, increasing the pressure of inventory loss of enterprises.

In the second half of the year, as China's epidemic prevention and control measures will become more scientific and precise, and a series of policies to stabilize the economy will gradually take effect, the macroeconomic fundamentals and the consumer side are expected to maintain the momentum of recovery, and the domestic demand for textile and garment products is also expected to rebound on the back of improved consumer confidence. However, it will take a long time for the consumer side to recover. In the textile industry, the demand growth of products with improved consumption attributes is relatively limited, and the domestic sales growth rate is facing pressure. The export of the industry faces risks such as high inflation restraining consumer demand and US restrictions on imports from Xinjiang, making it more difficult to maintain the current rapid growth rate. The overall cost pressure of enterprises is still relatively prominent. In the later period, if the downstream demand can pick up in time to support the price of terminal products, the operating pressure of textile enterprises can be gradually reduced. Textile enterprises should continue to pay attention to domestic and foreign market dynamics, raw material price trends and trade environment changes, optimize production and operation plans, expand diversified sales channels, improve cost management level and risk prevention and control awareness.