Textile Value Chain Running On Minimum Order Levels: ITMF
The entire textile value chain is running on minimum levels of orders and as long as brands and retailers do not increase orders, the entire textile value chain will continue to struggle.
This was the analysis of the International Textile Machinery Federation’s (ITMF) Global Textile Industry Survey (GTIS) conducted in the middle of September 2023.
Survey participants exhibited a cautious sentiment regarding the current business situation because companies in the entire textile value chain were struggling with rising costs and weak demand.
Expectations have remained unchanged since July although they jumped into positive territory in January 2023 on the assumption that Chinese economy would give an additional boost, but this hope did not materialise.
According to the survey, order intake recovered in May 2023, but flattened in July and remained very weak in September.
Order backlog slightly increased globally, from 1.9 months in July to 2.2 months in September 2023. This indicator had been on a falling trend since the end of 2021.
The average capacity utilisation rate dropped again globally to 69 percent and textile manufacturers expect this rate to remain low in six months’ time as well.
Weakening demand has been the major concern in the global textile value chain for a year.
In September 2023, this concern grew even stronger due to high inflation rates measured in the last few months, a phenomenon fueled by high energy and high raw material prices.
“Nevertheless, participants seem not to be concerned by order cancelations and inventory levels remain average along the textile value chain,” the survey noted.