Uncertainty in EU and U.S. textile and clothing markets
SpecialtyFabricsReview.com | July 26, 2012
Textile and clothing markets are likely to remain subdued in 2012, given the considerable uncertainty in the global economy and the fact that the debt crisis in the Eurozone continues to hit business and consumer confidence, according to Textile Outlook International from the global business information company Textiles Intelligence.
In the EU economy, the recovery that started in 2010 is expected to be snuffed out in 2012. Forecasts suggest that the EU economy will suffer a second dip in 2012 with GDP down in real terms by 0.5 percent. A partial recovery is predicted for 2013, but GDP is expected to grow by only 0.8 percent.
The prospects for the U.S. are less pessimistic. In 2012, GDP growth is expected to accelerate to 2.2 percent, from 1.7 percent in 2011, before falling back slightly to 2.1 percent in 2013. Nevertheless, clothing imports continue to be affected, with the volume of imports in the first quarter of 2012 down by 3.9 percent.
Weak market conditions in Europe and the U.S. affected exports from several Asian countries in the first quarter of 2012, following strong growth in 2011 as a whole. In Indonesia, for example, textile and clothing exports rose in value by 18.2 percent in 2011 but fell by 5.2 percent in the first quarter of 2012. In Thailand, exports rose in value by 7.5 percent in 2011 but declined by a sharp 15.3 percent in the first quarter of 2012. In the Philippines, clothing export growth slowed in value to just 1.1 percent in the first quarter of 2012 following an 11.4 percent rise in 2011. Export growth also slowed in several other countries.
In India, clothing exports fell in value by a sharp 11.9 percent in the 2011/12 financial year, which ended on March 31, 2012, having increased by 4.7 percent in the previous year. Reflecting the country’s weaker export prospects, Indian GDP growth forecasts for 2012 have been revised downwards.
The prospects for China—which has long been an engine of growth for the world economy—are similar, with GDP growth forecasts lowered from 9.0 percent to 8.2 percent. As a result, global GDP is expected to grow by only 2.1 percent in 2012 after increasing by 2.5 percent in 2011 and by 4.1 percent in 2010.
Nevertheless, emerging markets and, in particular, the so-called BRIC countries—Brazil, Russia, India and China—will continue to be the key to sustaining global trade growth over the coming years.