29 August 2012
Textile and clothing markets are likely to remain subdued in 2012, given the considerable uncertainty in the global economy.
The well-documented struggles in the global economy, particularly in the United States and European Union, are dragging down business and consumer confidence and will lead to a drop in demand for clothing and textiles, according to Textiles Intelligence.
Unfortunately, that decrease in demand is expected to hit cotton harder than its synthetic competitors, meaning it’s not only the market that’s shrinking, but also cotton’s share of it. Demand for cotton apparel will fall at a faster rate than demand for total apparel over the whole of 2012. Fabric producers are reporting slower sales of cotton fabrics as cotton prices continue to fluctuate and prices remain uncertain and, as a result, alternatives are being used – a popular choice being cellulose fibers such as viscose.
Some of the impact is already being seen: In the first five months of 2012, U.S. cotton apparel imports fell 12% while those for manmade fiber apparel imports rose 8%.
In the EU, the economic recovery that started in 2010 is expected to be snuffed out in 2012. Forecasts suggest that the EU economy will suffer a second dip in 2012 with GDP down 0.5% in real terms. A partial recovery is predicted for 2013, but GDP is expected to grow by a mere 0.8%.
The views of European textile manufacturers reflect this outlook. Having reported a notable recovery in their markets in 2011, the recovery slowed markedly in the last quarter of the year and the view now is that the effects of Europe’s economic turbulence will continue to have an adverse effect on trade during the remainder of 2012, and perhaps beyond. Indeed, in the first quarter of 2012, EU clothing imports were down in volume by a dramatic 12%.
The prospects for the United States are less pessimistic. In 2012, GDP growth is expected to accelerate to 2.2%, from 1.7% in 2011, before falling back slightly to 2.1% in 2013. Nevertheless, clothing imports continue to be affected, with the volume of imports in the first quarter of 2012 down 3.9%.
Source: Cotton International