In May 2023, the state of the world economy in the textile value chain reached a new low of -36 percentage points (pp). Across the board, businesses are currently having trouble keeping up with increased production costs while also experiencing a poor order intake.
The elements of a “perfect storm” are present in the sector. The majority of the global textile value chain anticipates that the current situation will continue through 2023. Business expectations have returned to positive territory since the year’s commencement.
They reached +22 pp in March 2022, but they were still at -10 pp in November 2022. They slightly retreated to +18 pp in May. Companies’ expectations for the business are also present. Since November 2022, the climate has been getting better over the next six months. It’s unclear whether this rising optimism about the medium-term future stems from the conviction that things can’t get any worse or from expectations of a sound return to normalcy in the economy.
In May 2023, order intake reached a new low. The majority of regions and business sectors had a decline in order intake, particularly North and Central America and the fibres sector. Since July 2022, “weakening demand” has continued to be the top concern for the global textile sector. The second most important global issue has increased and is still “inflation”. Concerns about “Geopolitics” have grown and are now among the top issues.
The poll also reveals that, although slightly higher than four, the level of order cancellations is still low. months ago. 51% of respondents to the 20th GTIS recorded no order cancelations during the last 4 months (down from 53% in March and 58% in January). South America is the region with the highest level of order cancelations, segment-wise fiber producers were impacted the most.
Inventory levels fell slightly in May compared to March. South America recorded the highest inventory level. As segments, home textile producers as well as dyers/finishers/printers reported the highest inventory levels
