Labor Costs - Textile Material Prices - Energy and Financial Costs

China Textile & Clothing Production Costs Country Report

Production prices are everywhere falling in China, but still rising in the clothing industry, as a result of higher wages. Our monthly report offers a statistical view of production costs and consumer prices in China, including in textile and clothing sectors. Labor costs in major provinces are also being tracked.

China's economic recovery could be driven by export demand, according to latest statistical surveys.

Two different PMI surveys just reported a rebound in export orders in March, meaning that China's competitiveness was significantly improved in the past months.

This also reflects a rebound in demand from recovering US and EU markets.

Slowing down growth, falling production prices

At the same time, China is further restructuring its economy, still feeling consequences of the global financial crisis of 2007.

Whereas official data report an improvement in production, HSBC/Markit survey tells that output levels are further deteriorating.

Internal demand would remain depressed, partly due to rising unemployment.

As a result of the current deceleration, production prices are further falling.

Lower raw material prices...

Especially, raw material costs are sharply declining, in line with the global commodity market prices.

For example, chemical fiber prices plunged by 7.7% in March, from the same month in 2013, according to official data.

This is reflecting much lower polyester and viscose prices from a year earlier.

Production prices fell in the textile industry in March, for the first time since last June.

... and higher labour costs

However, production prices still rose 0.8% in the clothing industry in March, showing no signs they could decline.

This is obviously more difficult to get new productivity gains at apparel plants than in other parts of Chinese industry.

The rise of labour costs is not offset by lower material prices, in addition.

Woven apparel exports have surged 6.8% in US$ terms in January and February, but knit apparel exports plunged by 15.1%.



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