High inflation and rising interest rates are the main current drivers of the global economy, but the core problem of the textile supply chain in 2023 is high inventories at the brand and retail levels, according to a survey by the International Textile Manufacturers Federation (ITMF).
With inflation rising, especially after the Russian invasion of Ukraine in February 2022, demand for consumer goods slowed while inventories remained very high, as per ITMF’s Global Textile Industry Survey (GTIS) in 2021.
Survey respondents confirmed that order intake has continuously decreased since November 2021. In January 2023, the indicator was negative in all regions and segments except for North and Central America, and fibre producers. The latter saw orders rise for the first time since last summer.
The previously high global order backlogs also steadily decreased from 3.1 months in March 2022 to 2.4 months in January 2023, mainly due to brands’ and retailers’ restraints to place orders. The dampening effects of the earlier supply chain disruption further helped reduce order backlogs by improving global trade flows which led to a slight rise in the capacity utilisation rate worldwide (mostly driven by fibre producers and spinners).
