Economic Update

T&C industry evolution during the first quarter
of 2022 and short-term prospects

Turnover recovery continued in the beginning of 2022, despite increasingly challenging economic conditions. T&C business expectations for the months ahead decreased, reflecting energy-related challenges and increased economic uncertainty.

Compared with the same period of 2021, economic performances in the textile & clothing industry improved significantly. However, compared to the previous quarter, the industry evolution during the first quarter of 2022 revealed a mixed picture: turnover improved further in both sectors, while production, employment, retail sales and exports faced a slowdown over the period. High energy prices, geopolitical tensions, increased transportation bottlenecks, sanctions against Russia and input shortages are today among the top concerns for companies.
After the optimism of the global “grand reopening” in 2021, 2022 could be much more of a rocky road for T&C manufacturers. Economic damage from the war in Ukraine will contribute to a significant slowdown in global growth in 2022. Both business and consumer confidence have taken a hit from the conflict, and higher commodity prices and extended supply-chain disruptions will deepen the cost of exporting for months to come.

The EU Business Confidence*indicator for the months ahead fell slightly in the textile (-1 point) and clothing industry (-0.4 point), reflecting their energy-related challenges and increased economic uncertainty. To note however that managers’ confidence in both textiles and clothing remains higher than its long-term average and to pre-Covid level in Q4 2019.

Besides, consumer confidence fell further below its long-term average, and closer to the record low recorded in April 2020, at the beginning of the COVID-19 pandemic. Retail trade confidence declined slightly, as managers’ slightly improved appraisal of the past business situation only partially offset the marked deterioration in their expected business situation. Selling price expectations for the next three months rose to unprecedented levels in all surveyed business sectors, including textiles and clothing. This is obviously related to the sharp increase in energy costs and raw materials. However, selling price expectations in the textile industry eased for the second month in a row.

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