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The pain of textile order transfer: the proportion of labor costs soared by more than 50%, and the industrial chain is under pressure!

The pain of textile order transfer: the proportion of labor costs soared by more than 50%, and the industrial chain is under pressure!

(Summary description)The latest data shows that China's exports of textiles, including masks, increased by 34.8% in the first 10 months. Behind this, the transfer of textile orders, including India, to the country is one of the important factors. In the past Golden Nine and Silver Ten, the return of Indian orders has indeed brought a wave of warmth to the textile industry. Behind this wave of warmth, some companies have made a fortune, and some companies have even worsened the situation.

The pain of textile order transfer: the proportion of labor costs soared by more than 50%, and the industrial chain is under pressure!

(Summary description)The latest data shows that China's exports of textiles, including masks, increased by 34.8% in the first 10 months. Behind this, the transfer of textile orders, including India, to the country is one of the important factors. In the past Golden Nine and Silver Ten, the return of Indian orders has indeed brought a wave of warmth to the textile industry. Behind this wave of warmth, some companies have made a fortune, and some companies have even worsened the situation.

Information

The latest data shows that China's exports of textiles, including masks, increased by 34.8% in the first 10 months. Behind this, the transfer of textile orders, including India, to the country is one of the important factors.

In the past Golden Nine and Silver Ten, the backflow of Indian orders has indeed brought a wave of warmth to the textile industry. Behind this wave of warmth, some companies have made a fortune, while some companies have even worsened the situation.

More than one textile boss has complained to the editor that due to lack of workers, the production capacity has not reached full capacity, which affects the delivery of orders. The person in charge of another manufacturer also said that the factory has only started to operate at full capacity in the near future. Last month, due to worker problems, a factory only maintained 80% of the operation. The main reason was the lack of skilled workers.

01 While orders skyrocketed, labor shortages reappeared

This illustrates two facts:

1. The fabric grab is over;

2, the labor shortage problem is coming again!

In fact, as early as October, when the market suddenly improved, the problem of "labor shortage" began to enter the vision of textile professionals.

The market suddenly broke out in October, and subsequently led to a surge in orders for the mainstream autumn and winter down jackets and cotton fabrics of nylon spinning, pongee spinning, and polyester taffeta. For a while, the market also appeared out of stock, queues and other goods. Textile bosses ushered in the best "honeymoon period" of the year. Inventories of marketable products dropped rapidly, and prices of individual grey fabrics also rose.

The skyrocketing market has caused production companies to change their previous style of reducing production and taking turns, and start full production. As a labor-intensive industry, the textile industry requires workers to operate it. However, because the market has been in a downturn in the first three quarters, many textile bosses have to cut production, holidays, and wage discounts in order to cut expenses, which has led to the loss of workers.

In the face of the sudden outbreak of the market, the problem of labor shortage will be triggered!

02 Labor costs have risen sharply

The textile industry is a typical labor-intensive industry. The labor advantage has made China the world's largest textile exporter. However, since 2012, as my country's demographic dividend has gradually disappeared, labor costs have increased year by year. The survey shows that the wages of textile factory workers in the southeast coastal areas are concentrated at 5,000-10,000 yuan, and the wages of workers in the central and western regions are roughly 3,000-6,000 yuan.

"Five years ago, the company's labor costs only accounted for 20%, and now it has reached 60%." said Wu Zhixiang, the boss of Jiangsu Liqiang Textile Co., Ltd. In addition, the instability of employees and the additional costs caused by accelerated turnover are also problems facing the company.

He believes that the reason for the increase is that, on the one hand, the cost of living caused by inflation has increased, and on the other hand, the labor force has declined. "For example, in our textile industry, the work content is very hard. After 90, don’t want to do it, don’t think about it after 00.”

The survey found that even though the employers think that the overall salary of the textile and apparel industry is not low, the employees are not very satisfied with it.

Liang Wei (pseudonym) has been engaged in the textile industry for 17 years, worked in Fujian for more than 9 years, spent 3 years in Jiangsu, and then worked in Guangzhou and Shantou for 2 years. He worked as a car stopper, management and machine repair. He is currently doing cloth weaving in Zhejiang Work, responsible for controlling 2 machines. When work is busy, I have to work 12 hours a day, morning and evening shifts, few vacations, and not little pressure.

He said that the initial salary was only 4,000 yuan, and now it is 9,000 yuan on a monthly basis. "The average worker sees 2 machines, and the basic salary is 7,500 yuan, but a skilled worker can see 6 machines for 2 people, which is an extra 7,500. Yuan, the boss will give these two people appropriate processing capital."

Although the wages he received are increasing, Liang Wei said, "I have been working for so many years, and I feel that the wages have not gone up. As wages are rising, prices are also rising."

Deng Jian (a pseudonym) also has similar feelings. He has been in the textile industry for 11 years. He is currently working as a shaman in a textile factory in Fujian. His salary is calculated by piece, and the minimum guarantee is 1,800 yuan. For one or two months, it is more than 6,000 yuan. At work, the salary is relatively stable. As long as you go to work, you don’t have to worry about no money and support your family."

However, he added, “Although wages have risen, prices have also risen, so you earn more and spend more.”

It is not only labor costs that have risen, but also the cost of raw materials. Chen Huan told the 21st Century Business Herald that the labor cost of the company used to be about 30%, and the material cost was 30%. Now the labor cost exceeds 50%, even reaching 60%, and the material cost is also 40%, so the current profit point It is difficult to reach 5%, and larger quantities can make money, and price increases are inevitable.

Labor costs continue to increase, but product prices cannot rise, and profit margins are compressed, causing textile companies to face pressure. At present, it seems that textile orders transferred abroad can be retained for some time, but it is difficult to retain them for a long time.

03 Textile industry upgrade and transformation pain points

The high labor cost, especially the high labor cost of eastern enterprises, has caused two trends in my country's textile and garment industry chain, one is migration from the east to the midwest, and the other is migration from my country to Southeast Asia and India.

In the eastern cities where textile industry was one of the main industries before, the share of textile industry in local industries in many cities has declined.



For example, in 2015, the industries above designated size in Huzhou, Zhejiang, achieved main business income of 408.24 billion yuan, and the textile industry reached 5.16 billion yuan; but by 2019, the local industries above designated size achieved operating income of 491.69 billion yuan, and the textile industry only reached 2.41 billion yuan. In Shaoxing City, Zhejiang Province, the textile industry is one of the four major local traditional industries. However, in 2019, the output of major industrial products above designated size in the city declined in many sub-variety of textiles and garments. For example, the total output of cloth in 2015 was 4.774 billion meters. The output of cloth by 2019 is 1.337 billion meters.

There are two reasons for such results:

On the one hand, due to financial and cost pressures, it is difficult for many SMEs to recruit higher-level technical talents.

Generally speaking, factories can recruit workers, but they cannot recruit experienced masters. At the same time, some skilled workers believe that the textile and garment industry is tired and do not plan to keep working. In fact, the lack of high-skilled workers is the plight of the entire textile and garment industry and even the manufacturing industry.

The market’s demand for employment of workers with technical levels and professional technical titles is greater than the supply, and there is a large gap in the demand for professional and technical personnel and senior skilled personnel; compared with the previous quarter and the same period last year, the market has a certain technical level for general workers and Demand and growth of workers. From the demand side, 41.4% of market employment needs have clear requirements for technical level or title.

On the other hand, the maturity of the high-end product market in the domestic textile and apparel industry is not high. Chen Huan, the boss of Guangzhou Canping Garment Co., Ltd., confessed that it is difficult for small and medium-sized enterprises to produce high-precision automated manufacturing products, mainly because the domestic high-end product consumer group is not large enough, and the high-end product market is not yet mature. “We can’t do it either. To produce high-quality products, this requires the promotion of the entire market."

And the replacement of machines is very fast. The cost of a machine is relatively high. If automation is promoted, the productivity can increase by 10%-20% and the profit point can be maintained at about 10% under the condition of the original number of workers. But if you use an old machine, the above effect will not be achieved.

At present, the textile and apparel orders transferred from abroad can "quench the thirst". The long-term development of the domestic textile and apparel industry still needs to repeatedly balance between high cost and high quality and move slowly.

In the face of the November market that has come, we must not only grasp the current market share, but also seize the opportunity and continue to innovate and make breakthroughs.

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Copyright © 2020  Sichuan Chuanmian Textile Co., Ltd.

Powered by www.300.cn   蜀ICP备14014859号