By Sourcing Journal
This article was originally published in Sourcing Journal October 5, 2020.
Are things looking up for the textiles sector? Survey says: yes.
The fifth International Textile Manufacturers Federation (ITMF) “Corona-Survey,” conducted between Sept. 5-25 among members and affiliated companies and associations about the impact the coronavirus pandemic has had on the global textile value chain, indicated an improving outlook.
When representatives from the 216 companies from around the world who participated in the survey were asked about sales expectations for this year compared to last, their forecast fell to 16 percent compared to the previous survey taken May 20 to June 8, when respondents said they were expecting a drop in sales of around 32 percent.
The most recent survey asked for the first time about the sales expectations for the next four years. On a global average, the expectations are that in 2021, the global textile industry is expecting stagnation (-1 percent). In 2022, companies said they are projecting a sales increase of 9 percent, followed by a 14 percent gain in 2023 and an 18 percent hike in 2024 compared to the base year of 2019.
Looking at the different segments of the textile value chain, finishers and printers had the most extreme outlook, expecting a 30 percent sales decline in 2020. Weavers and knitters forecast volume to fall 23 percent, fiber manufacturers projected a 22 percent decrease, yarn spinners said a 17 percent drop-off was expected, garment manufacturers predicted a 16 percent decline and integrated manufacturers expect a 15 percent sales drop.
“The Corona pandemic has proven in a brutal way how important digital capabilities are when physical interactions with suppliers or customers are impossible or restricted,” ITMF said. “Twenty-one percent of all companies see a necessity to improve their digital capabilities, 18 percent are of the opinion that reducing the dependency from few customers is important going forward, followed by 17 percent of companies for which both broadening the products on offers and strengthening the balance sheet are crucial in the future.”
ITMF conducted its first three industry surveys in March and April as the pandemic was reaching global proportions, and factory and retail shutdowns were being imposed.