TEXTILES

2020 was the worst year to date for the textile manufacturing industry, with activity falling by an estimated -15% . The  Covid-19 outbreak took a toll on global trade, manufacturing and retail activities from early February to June, before disrupting retail activities again in Q4. Of all the major components of retail, apparel was hit the most, with retail sales falling by as much as -90% under lockdown in some European markets. It was also the segment that saw the slowest recovery after the easing of retail restrictions, with sales still -20% to -35% below their pre-crisis levels. Meanwhile, the pace of insolvencies among large clothing retailers and department store chains accelerated, increasing non-payment risks in an already vulnerable industry. The fashion and sportswear segments showed greater resilience, while personal protection equipment sales soared. Dominant Asian manufacturers (China, Vietnam) outperformed the wider industry.

2021 will see the industry returning to growth, but continuity in retail activity alone will not be enough to return to pre-crisis levels any time soon. The pandemic has had a clear psychological impact on consumer behaviour that has proven detrimental to demand for apparel. The increase in unemployment will also weigh on demand, apparel sales being strongly correlated to changes in consumer income.