European textile industry records downturn for Q4 2022

According to the most recent data gathered by Euratex, the European Apparel and Textile Confederation, European textile output decreased in Q4 2022, the first decline seen in nearly two years. On the other hand, European apparel manufacturing started to rise once more at the end of last year after decreasing in Q3.

The Euratex index, which is based on pre-pandemic levels and more especially on Q4 2019, which serves as a reference point, highlighted the trends (with a value of 100).

The textile output index peaked at 116.6 in Q3 2022 before dropping to 116.3 over the ensuing three months. Only one additional output inflection point had occurred in the sector since Q3 2020, and that was in Q1 2021.

According to Euratex, the supply chain“continues to struggle with challenging market conditions and insufficient demand.”Euratex, meanwhile, praised the“solid rebound in activity”in the garment industry.

As European apparel output finally reached pre-pandemic levels in Q1 2022, the production index hit 100.6; from there, it increased to 110.5 the following quarter; but, as energy costs became a significant issue for the industry, it decreased again to 106.7 the following three months. In Q4 2022, the index’s value eventually increased to 114.9.

“The European gas benchmark price has fallen below its pre- [Ukraine invasion] level. Despite the energy shock and ensuing record-high inflation, the EU economy managed a broad stagnation in the fourth quarter, instead of the expected contraction,”noted Euratex.

The organisation that represents European business welcomed the recent decline in inflation rates, which may indicate that the peak is behind us, but it remained watchful:“Tumult in the banking sector, which would heighten economic uncertainty, has emerged as a new downside risk to the global economy for 2023.”

a factor that affected the confidence index for the garment and textile industry. The index decreased by 1.2 points among textile manufacturers and by 1.3 points among garment manufacturers between January and March 2023. This pessimism has been associated with poorer order books and the possibility of having insufficient final product inventories.