How do we see the US & Europe textile demand coming back in 2023
31 January 2023, Mumbai
The domestic yarn and fabric producers, cotton, wool, synthetic fiber suppliers, dyers, printers, finishers, machinery, and textile chemical industries, and our American garment industry clients make up the domestic textile industry.
Every area of the United States has a textile industry, suppliers, and consumers, which comprise a significant part of the nation's economy. For many years, the sector has been a stepping stone for people out of poverty and into well-paying occupations in rural areas. Over 8,000 goods are annually provided to our men and women in uniform by the industry, which also significantly contributes to our nation's defense.
The sector is a substantial driver of high-tech innovation, to sum up. Today, textile goods play a significant role in everything from airplane hulls and sophisticated body armor to heart valves and stents.
According to industry sources, India's $200 billion textile and garment sector is in crisis as customers in the United States, Europe, and other major countries have reduced apparel/clothing purchases in response to a spike in inflation following the conflict in Ukraine.
The textile industry is a striking exception to the otherwise healthy and thriving economy, and orders indicate that the slump will go far into 2023, increasing the possibility of layoffs in a sector that employs more than 45 million people.
Global retail sales of clothes have been negatively impacted by high inflation and low consumer confidence after 18 months of solid growth through mid-2022. The outlook for 2023 is bleak, according to a McKinsey analysis released last month.
The US market and its growth
Despite solid development elsewhere, India's manufacturing sector, which accounts for 16% of GDP, has been hurt by rising raw material costs and poor demand. While the entire economy gained 6.3% in the first half of the current April-March fiscal year, aided by agriculture and services, manufacturing did not show any improvement.
As businesses struggle to pass on higher input prices, textile producers have also been impacted, along with footwear, furniture, electronics, and electrical producers. Consumer spending on these items has decreased as they spend more on food and gasoline.
Manufacturers in the textile sector claim that increasing local cotton prices and other costs have reduced profit margins. At the same time, domestic demand is still poor and international orders for next summer are down by around one-third.
The size of the textile and apparel manufacturing sector in the U.S. has significantly shrunk over the past several decades due to several causes, including automation, import competition, and evolving comparative advantages for related products. However, American textile manufacturing is gradually resuming. The American government claims that one job in the textile industry supports three other ones.
In the United States, 534,000 people were employed in the textile supply chain in 2021, from textile fibers to garments and other stitched items. According to government figures, American exports of textiles and apparel were worth USD 65.2 billion in 2021.
The United States is the world's second-largest exporter of articles linked to textiles. The combined value of textile, apparel, and fiber exports in 2021 was USD 28.4 billion.
