Survey Results: Garment Factories in China Slowly Resume Production amid the Fight against the Coronavirus Outbreak

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A recent survey of 294 apparel companies and 20 apparel industry clusters* in China was conducted by the China Garment Association between February 19 and 20, 2020, aiming to understand the impact of the coronavirus (2019-nCoV) on China’s garment industry and production. The respondents of the survey include both garment factories (63.3%) and apparel brands (36.7%). Around 83.4% surveyed companies reported over RMB20 million (or $2.85million) sales revenues.  Below are the key findings:

State of Production

  • 68.4% of surveyed companies say they have gradually resumed production. Of these companies, about 45.6% of their workers in need have returned. The surveyed companies also expect their production output to reach 50% of its normal level by March and could fully recover by April, should the situation stabilized.
  • However, still, as many as 31.6% of surveyed companies say they have not resumed production because of a mix of factors ranging from the need to prevent coronavirus, government restrictions, to the difficulty in recruiting workers. Further, for apparel companies from areas most affected by the coronavirus, they report no plan for reopening anytime soon.
  • Around 87.2% surveyed “large companies” have resumed production, much higher than “medium-sized” (65.4%) and “small-sized” (34.7%) enterprises. [Note: according to China’s Bureau of Statistics, for manufacturers, “large companies” typically refer to those with over 1,000 employees and over RMB400 million (or $57million) annual sales revenue; “small or mini-sized companies” are those with employees less than 200 and less than RMB3million (or $0.43million) annual sales revenues. “medium-sized companies” are those in between].
  • Further, around 74.3% of surveyed apparel brands have resumed business operations, higher than 64.9% of garment factories. Meanwhile, some apparel brands say only their management team have resumed work or those positions that can be done through work from home; however, their plants remain closed.
  • Over half of the surveyed companies (54.08%) say less than 50% of their workers have returned. The lack of workers is a more pressing issue for small-sized companies, with over 80% having less than 50% of workers returned.

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Key challenges facing the surveyed companies:

  • #1: Lack of workers, especially to have those workers from other parts of China return to the factory due to travel restrictions (68.7%)
  • #2: Production cost increase and a lack of supply of raw material from the upstream sector (29.9%)
  • #3: Slow and stagnant sales, overstock of finished products due to delayed orders and tight with cash flows (20.6%)
  • #4: Weak market demand and cancellation of orders (19.2%)
  • #4: Disrupted logistics and transportation (19.2%)
  • #6: Hard to procure protective equipment for staffs and workers (such as facial masks) (16.8%)
  • #7: Cancellation of exhibitions, harder to explore markets and more financial burdens (8.4%)

(*Note: apparel industry clusters refer to geographic concentrations of interconnected factories that manufacture a particular type of apparel product)

Related reading: Apparel Sourcing in the Shadow of Coronavirus (updated February 2020)

Author: Sheng Lu

Professor @ University of Delaware

5 thoughts on “Survey Results: Garment Factories in China Slowly Resume Production amid the Fight against the Coronavirus Outbreak”

  1. This specific article is so timely and interesting to me due to the fact that I am currently job searching! When I wrote to the company I interned with, they said they don’t have much work right now since all the factories they use had closed due to the coronavirus. However, recently they emailed me again saying the factories were opening back up so we could continue the conversation. They use pretty large factories, so I am not surprised that they reopened so soon, as the information above states that the larger companies have more likely resumed work than the smaller ones.

  2. With the recent events of the U.S. surpassing the amount of Corona virus cases, how do you think that will now affect the production in China. Now that garment factories in China are resuming production, will they be shipping to the U.S. and European nations or not due to the peak not even happening in these countries. Where will the products hat are being made in these factories be shipped to or stored?

  3. With the current state of the US and the restrictions we have, I think it’s unbelievable that people are returning back to work especially in countries that don’t have the same healthcare systems and same hygiene practices that we do. I think that right now people are scared/unable to go back to work from the virus however those that are back to work probably can’t afford to not work. I think something that needs to be watched is the treatment of these workers during this time. Social responsibility can’t be forgotten about just because there is a pandemic.

    1. I agree with your position when you are talking about how crazy it is that people are going back to work with corona cases still killing hundreds and hundreds of people a day. However, you are probably correct in saying that the people who are actually going back to work can’t afford not to right now. It is a hard decision for people who are in these circumstance to either keep staying home to be safe from the virus or to work to be able to put food on the table for their families. I think during these times it is extra scary and stressful for people right now and we all need to do out best to be understanding and compassionate.

  4. This article hits home for me because I am due to start a job in New York City in August 2020. I can identify with the Textile & Apparel industry in China having problems with workers concerned about contracting COVID-19 since New York City was hit so hard, I too am concerned about living in such an impact zone. Also taking public transportation will require special equipment just to protect myself getting to work. The Textile and Apparel industry in China has the added problem of not getting enough workers to come in due to immigration travel restrictions. They must also supply personal protective equipment to their workers and create more space among them. So for me personally, I hope I have a job to go to and for the Textile and Apparel workers in China, I’m sure they want to work but need protections. It is a problem the Chinese Textile and Apparel industries will need to address as demand returns and production ramps up to pre-COVID-19 levels.

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