Global textile manufacturers eye imminent recovery

By

Matthieu Guinebault

Translated by
Roberta HERRERA

Published
August 30, 2024

Periodically surveying its members from around 30 producing countries, the International Textile Manufacturers Federation (ITMF) reported in its latest publication a hopeful outlook for a forthcoming rebound in global demand for textile materials, following an unusually prolonged slowdown in activity.

"This highly contrasting scenario indicates that companies anticipate an end to this unprecedentedly long economic downturn," stated the ITMF in its summer publication. The report simultaneously noted the current weak demand while projecting optimism for the latter half of the fiscal year.

In the interim, the reality for the sector remains bleak. As of July, the capacity utilization rate in production plummeted to a mere 68%—a record low that had been previously reached at the end of 2023, severely impacted by a drop in European consumption triggered by local inflation.

"The predominant concern across the textile value chain was, and continues to be, the weakness of demand," the federation reported. "66% of participants identified weak demand as a major concern." This issue outweighed concerns about geopolitical issues (cited by 40% of respondents) which influence both supply chain decisions and consumer behavior.

Another significant concern was high costs, particularly logistics costs, which 24% of respondents noted as being exacerbated by the inflated freight costs due to accessibility issues in the Suez and Panama canals. Additionally, worries about energy costs (22%) and the prices of raw materials (27%) persisted.

Manufacturers, however, indicated that order cancellations are no longer a significant issue, nor are inventory levels, which are now at average levels. "The situation differs for retailers and brands, who have had to contend with unprecedented stock levels since late 2022," the ITMF noted. The organization anticipates that these businesses will replenish their inventories in the coming months.