ITMF's Global Textile Survey July 2024 emphasizes the challenging environment of low order intake. Weak demand is the biggest concern, followed by geopolitical tensions and high logistics, energy and raw material costs. Despite these concerns, order cancellations are less of an issue, and average inventory levels suggest that orders are likely to increase.
ITMF's July 2024 Global Textile Industry Survey (GTIS) shows that the global textile value chain remains in a challenging business environment. While on average business conditions are grim, reflecting low order books, business expectations six months out remain optimistic. This situation suggests that firms expect this unprecedented prolonged weak business cycle to come to an end.
Compared with May (-24pc), order books increased slightly in July (-20pc), much better than in November 2023 (-50pc). However, capacity utilization declined slightly, from 71% to 68%, the lowest level reached at the end of 2023. The outlook for both order intake and capacity utilization has not improved significantly.
The main issue across the textile value chain is weak demand, which was cited by 66 per cent of participants as their main concern. Geopolitics is now the second biggest concern (40%), indicating that investor and consumer sentiment is being affected by war and geopolitical tensions. High costs also remain a challenge, particularly rising logistics costs due to problems with access to the Suez and Panama Canals (24%), as well as energy costs (22%) and raw material costs (27%).
Order cancellations are not a major problem, as they were when the Corona epidemic first occurred. Inventory levels are also at average levels and will not have a major impact on companies along the textile value chain. However, the situation is different for retailers and brands, which have been struggling with unprecedented inventory levels since the end of 2022. In the meantime, their inventories have fallen to a level where they are expected to place more orders again in the coming months.
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