Textile and clothing industry evolution
in the 1st quarter 2024 and short-term prospects
The T&C industry has entered 2024 on a disappointing footing.
Looking forward, managers’ confidence improved in the textile sector.
The textile and clothing sector showed poor economic performances. Weak demand, driven by ongoing factors such as still high energy prices, persistent inflation, economic uncertainty and geopolitical tensions, are exacerbated by a manufacturing crisis affecting the largest textile-using sectors, including clothing, construction and automotive.
In the first quarter, European production and turnover went down across most textile sub-sectors. Similarly, the labour market deteriorated, with EU employment declining in the textile and clothing industry. Additionally, EU imports rose as compared with the previous quarter, but external trade went further down year-on-year. The trade slump appeared to be broad-based, involving a large number of countries and products. The negative trends in the sector demonstrate that the industry is still suffering from weak demand, lack of orders and uncompetitive energy costs. These factors are clearly weighing on the expected recovery of the EU T&C industry.
Hopefully, the broader economic performance of the European economy are showing some positive prospects. The European Commission reported a better-than-expected growth at the start of 2024 [1]. Furthermore, a gradual acceleration in growth over the course of this year and next is expected, as private consumption is supported by declining inflation, recovering purchasing power and continued employment growth. On the external side, foreign demand is expected to expand, supporting euro area export growth.
Finally, the EU business sentiment [2] showed some improvement in the textile industry, while it lost momentum in the clothing segment. The employment expectations indicator improved in textiles but reported a decline in the clothing sector. From the consumer perspective, confidence rose marginally, reflecting consumers’ improving views on their household’s past financial situation and intentions to make major purchases. Retail trade confidence deteriorated slightly for the third month in a row.
¹ EU Commission’s Jun. 2024 survey: European Business Cycle indicators and Business Consumer Survey (subsector database)
² DG ECFIN, “Spring 2024 Economic Forecast: A gradual expansion amid high geopolitical risks”
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