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The 2017 State of the Industry: Part 2

Features, State of the Industry | March 1, 2017 | By:

The slow economic recovery after the Great Recession has made kick-starting growth in the specialty fabrics industry a continuing challenge. Five of the six key markets covered in Part 2 of this report showed growth in 2016, which is expected to continue in 2017. (The military market was down 6 percent, and is expected to be flat in 2017.) A focus on innovation is still the key to success: in planning, in process, in products and in services to increasingly demanding customers.

Part I of IFAI’s 2017 State of the Industry report (presented in the Feb. 2017 Specialty Fabrics Review) discussed key markets, issues and trends in the U.S. and global specialty fabrics marketplace. The article also included an overview of five key market segments in the U.S. and Canadian specialty fabrics industry—awnings and canopies, marine fabrication, tent rental, fabric structures and fabric graphics. In Part 2, we focus on six additional important end-product markets, primarily in the United States: the military, advanced textile products, narrow fabrics, geosynthetics, tarpaulins and truck covers, and industrial fabric equipment. All but one of these six market segments monitored by IFAI throughout the year achieved single-digit sales growth in 2016; the military market was down 6 percent.

IFAI interviews and surveys with specialty fabrics organizations over the past few years reveal a common theme: organizations that regularly invest in key aspects of their businesses tend to achieve high single-digit to double-digit sales growth on a yearly basis. Some of these aspects of business invested in by successful specialty fabrics firms:

  • Innovations in operations and manufacturing such as mini-mills that produce custom yarn and fabric orders for the customer, rather than relying upon the larger yarn and fabric orders that larger mills must produce in order to produce order quantities that are profitable.
  • Research and development that continuously spawns leading-edge technologies as well as new applications, products and services.
  • State-of-the-art equipment in all phases of the business—for example, manufacturing as well as business functions like information technology (IT). IT investments cited by specialty fabrics manufacturers help them to get closer to their customers by improving their supply chain logistics—which provides a means for those companies to expedite and track customer orders quickly and accurately. If an order problem occurs, it helps to resolve it more quickly.
  • Employing ongoing training and education of staff.
  • Enhanced marketing—promotions, publicity and advertising via the Web, social media and trade shows.

Key U.S./Canadian markets

IFAI serves the global specialty fabrics industry with information on key markets, issues and trends. For this report, participants in 11 U.S. and Canadian markets were researched and surveyed.

Five of those markets were covered in Part I of the 2017 State of the Industry report: awnings and canopies, marine fabrication, fabric structures, fabric graphics, and tent rental and manufacturing.

Six markets are covered in Part 2 in this issue: military, advanced textile products/safety and protective products, narrow fabrics, geosynthetics, tarpaulins and truck covers and industrial fabric equipment.


The U.S. military market covers safety and protective products (including the use of smart technology) for troops, firefighters and law enforcement. A driving force behind product development for the firefighter, law enforcement and industrial markets, the military’s influence on the safety and protective market will continue through 2017. Due, in large part, to the withdrawal of most U.S. troops deployed in Iraq and Afghanistan before 2015, spending on U.S. military textiles and clothing in 2016 was down 6 percent from 2015—coming in at $1.5 billion. Growth is expected to be flat in 2017, with spending remaining at $1.5 billion; although growth has been slow over the last few years, the level of spending on military textiles and clothing is still a substantial amount at $1.5 billion. The United States military had 5,000 troops in Iraq as of December 2016—aiding the Iraqi forces in their quest to retake the Islamic State-held city of Mosul. As of December 2016, the U.S. has committed 8,400 U.S. troops in Afghanistan to combat the resilient Taliban.

World military expenditures totalled $1.7 trillion in 2015, a decrease of 5.6 percent compared to 2014. The U.S. is the leading military spender in the world, representing 36 percent of the global market—spending $598.5 billion in 2015, $580 billion in 2016, and projected to spend $602 billion in 2017, up 4 percent from 2016. The U.S. outspends the seven next highest-spending nations on defense (China, Saudi Arabia, Russia, the United Kingdom, India, France and Japan).

After the U.S., China, Russia, Saudi Arabia and the United Kingdom were the biggest military spenders in 2015. Saudi Arabia increased its military expenditures by 5.7 percent, overtaking Russia to become the third-largest military spender in 2015, due mainly to the fall in the value of the rouble. China increased its military expenditures 7.4 percent in 2015. China’s rate of increase in military spending began to slow in 2016 as it fell in line with its weakening economic growth in GDP, 6.9 percent in 2015 and 6.6 percent in 2016; this is quite low compared to 10.6 percent in 2010 and 9.5 percent in 2011. The economic crisis related to falling oil and gas prices means that Russia’s military expenditure increase of 7.5 percent in 2015 was considerably lower than projected in its budget.

While military spending in Western Europe fell 1.3 percent in 2015, the three biggest spenders—France, the United Kingdom and Germany—have all signalled increases in spending in the coming years. Growth in military spending was most apparent in the countries bordering Russia and the Ukraine, reflecting the escalating fear of possible threats from Russia.

Military expenditures in Asia and Oceania increased 5.4 percent in 2015, reaching $436 billion. China was by far the highest military spender in the region in 2015 with an estimated $215 billion, or 49 percent of the regional spending. This amount is more than four times the amount spent by India, the region’s second-largest spender. India plans to increase military spending by about 8 percent in 2016—due mostly to funding large procurement programs.

Tensions with China over the South China Sea were reflected in substantial growth in military expenditures in 2015 by Indonesia (16 percent), the Philippines (25 percent) and Vietnam (7.6 percent). Japan also began increasing military spending in 2015 after years of decline—signalling a rise in the perception of threats from China and North Korea.

In 2015, military expenditures decreased in Africa after an 11-year trend of spending increases. Spending also declined in Latin America. The rapid fall in oil prices that began in late 2014 has led to an abrupt reduction in military spending in a number of countries that had increased their levels of spending in recent years, including Angola, Chad, Ecuador, Oman, South Sudan and Venezuela. Going against that trend, oil revenue-dependent countries like Russia and Saudi Arabia continued to increase spending in 2015.

ADVANCED TEXTILE PRODUCTS (Safety and protective market)

ATchartGrowth in the U.S. advanced textile products market was up 6 percent in 2016, and is expected to increase another 6 percent in 2017 (from 2016). Growth was supported by a noticeably improved job market in 2016—with unemployment dropping to 4.9 percent (versus 5.3 percent in 2015). The U.S. manufacturing sector has remained stable over the past four years. In fact, according to the December 2016 Manufacturing ISM Report on Business poll of U.S. supply executives, in terms of the U.S. manufacturing sector, the overall economy has grown for 90 consecutive months.

Growth in the U.S. advanced textile products market was up 6 percent in 2016, and is expected to increase another 6 percent in 2017 (from 2016). Growth was supported by a noticeably improved job market in 2016—with unemployment dropping to 4.9 percent (versus 5.3 percent in 2015). The U.S. manufacturing sector has remained stable over the past four years. In fact, according to the December 2016 Manufacturing ISM Report on Business poll of U.S. supply executives, in terms of the U.S. manufacturing sector, the overall economy has grown for 90 consecutive months.

Outlook for the advanced textile products market

Suppliers and end product manufacturers in the U.S. advanced textile products market should see improved sales in 2017 due to a steadily improving economy and employment environment. Confidence in a sustained expansion of the U.S. economy has grown strong enough that, in mid-December 2016, the Federal Reserve raised its benchmark, federal funds interest rate from a range of ¼ to ½ percent to ½ to ¾ percent; it was just the second time in a decade that the Fed has raised rates. The federal funds rate is the amount that banks charge to lend to each other overnight; the rate increase was executed due to strong improvement in the U.S. labor market—declining unemployment rate, a moderate increase in household spending—and to maintain inflation below the longer-range objective of 2 percent.

Markets like military clothing, construction, and industrial—especially the automobile/industrial markets—will continue to drive growth in the advanced textile products market in 2017. A recent survey of IFAI advanced textile products members shows a trend suppliers and fabricators cited in 2015–2016 and expect to continue in 2017: continued strong sales in the high-temperature, flame-resistant products area—which serves markets such as the military, firefighters and arc welding in the industrial market.

Leading trends in the U.S. advanced textile products market in 2016 and 2017

  • Increasing compliance by companies with government safety regulations; market participants are focusing on conformance with safety legislation—ANSI compliant clothing.
  • Increasing adoption of personal safety in emerging markets, especially in China and India as their workforces continue to become more organized—demanding worker rights. The increase in organized labor in China has prompted it to shift some of its production to other low-cost counties such as Vietnam, Laos, Bangladesh and Africa—including  Ethiopia and Kenya. These companies are seeking less expensive sources of labor to keep their costs down—due largely to weak demand in Europe and flat demand in the U.S.
  • Growth in the safety and protective market in emerging economies like China. Much of this increase is due to China’s substantial investments in large-scale infrastructure construction and urbanization projects in 2016 and beyond. Growth in China’s safety and protective market is also being facilitated by the country’s rapid development in advanced markets such as the military and automobiles. In terms of military expenditures in 2016, China was again the second-leading spender in the world at $215 billion; China continues to be the world’s largest producer of cars and commercial vehicles in 2015 (24.5 million), double the number that the U.S. produced (12.1 million).

IFAI focuses on five key segments in the narrow fabrics market: webbing for automotive seat belts, military textiles and clothing, safety products such as harnesses, transportation products such as tie-downs and slings, and medical products such as straps, orthopedic braces, gauze and bandages.

Overall, the U.S. and Canadian narrow fabrics market grew an estimated 2.5 percent in 2016, and is expected to grow by 3 percent in 2017. The main growth area over the last few years has been webbing for seat belts in the automotive market. The sales of new light vehicles in the U.S. grew a scant 0.4 percent in 2016—reaching 17.4 million vehicles, which translates into 262 million meters of seat belt fabric sold. Innovative narrow fabrics in the seat belt market are beginning to make an impact on the market—for example, there are now smart fabric seat belts that warn drivers who become drowsy while driving.

Spending on military textiles and clothing in the U.S. military market was 1.5 billion in 2016, down 6 percent from 2015. The Defense Logistics Agency (DLA) expects spending on textiles and clothing will remain at $1.5 billion in 2017. The military is always looking for the most technologically advanced textiles available—for example, lighter weight, fire-retardant, abrasion-resistant products that don’t compromise performance or tensile strength and flammability.

The market for safety products (safety or fall-control harnesses) expanded 3 percent in 2016.  In December 2015, the passage of the federal “Fixing America’s Surface Transportation (FAST) Act” law provided stability for public highway construction in 2016. Growth in the safety products market could have been higher than 3 percent, but many state DOTs did not obligate their federal funds in time.

Encouraging developments for the safety products market segment in 2017 include:

  • An improved U.S. economy—with a projected GDP of 2.1 percent
  • Improved fire-retardant elastics for safety harnesses
  • Self-retracting lanyards, also known as lifelines (a fall arrester with a range of 6–200 feet in length)
  • Lighter, safer and more comfortable harnesses, which encourage greater usage by workers
  • Increased enforcement for wearing safety attire from OSHA

Despite the trend of economic and political uncertainty going into the U.S. marketplace in 2017, the safety products market is expected to grow 3 percent again this year.

Tie-downs and sling sales in the transportation market have been growing at levels of 3 percent per year over the last couple of years. After the passage of the FAST Act, higher growth in the 4–5 percent range in 2016 was anticipated; but the slow release of obligated funds by state DOTs delayed some $900 million dollars in highway construction investment until the spring of 2017. Also hindering growth for U. S. tie-down manufacturers is a slow-growing U.S. economy (2 percent) and competition from inexpensive imports from China and Korea, which could dampen growth to current levels—3 percent in 2017.

The medical products market increased 5 percent in 2016, and is expected to grow another 5 percent in 2017, driven by 80 million baby boomers and 83 million millennials. The orthopedic materials market continues to see growth in the U.S. and internationally.

People of all ages continued to spend money on new, innovative smart narrow fabrics products in 2016, such as remote-monitoring devices—narrow fabrics straps/harnesses are often used to attach monitoring devices to the body. People can share their medical information with their doctors via products that measure heart rate, pulse and other vital signs and then transmit them electronically.

Outlook for the narrow fabrics market

E-textiles/smart fabrics comprise the leading growth market segment of advanced technology that people are beginning to demand. Other developments include technological advancements in composites, where the weight-to-strength ratio continues to increase their usage and utility in the automotive and aerospace markets.

The narrow fabrics industry in the U.S. continues to consolidate. To maintain and improve a company’s ranking in the marketplace, innovation continues to be key. Narrow fabrics manufacturers must find ways to develop and cultivate relationships throughout the supply chain to keep abreast of industry developments and trends. The development of new technologies and new products will be increasingly important, as will identifying and competing in new markets on a global scale.


The U.S. and Canadian geosynthetics market includes geotextiles, geomembranes, geogrids, geosynthetic clay liners, drainage materials, geocells and erosion-control material. In 2016, the size of the U.S./Canadian geosynthetics market was $2.6 billion dollars, an increase of 3.5 percent from 2015. It is expected to swell to $2.7 billion in 2017, an increase of 4 percent. In a survey of Geosynthetic Materials Association  (GMA) members and nonmembers in October 2016, respondents reported that they expect sales to be somewhat better in 2017 than in 2016.

Critical issues

Due to the strong U.S. dollar in 2016–2017, coupled with subdued growth in economies across the globe, U.S. geosynthetic manufacturers will likely experience increased competition for sales due to more inexpensive imports coming into the United States.

The  Water Infrastructure Improvements for the Nation (WIIN) Act, signed by President Obama in December 2016, is a law that includes the new Water Resources Development Act (WRDA) of 2016, which passed the House in September (see sidebar). Its provisions are designed to improve drinking water infrastructure around the country, address control of coal combustion residuals, improve water storage and delivery to help drought-stricken communities, address federal dam maintenance backlogs, and approve long-standing water settlement agreements for the benefit of taxpayers and Native Americans.

Prior to the WIIN Act, the U.S. Environmental Protection Agency (EPA) was solely responsible for implementing regulations for coal combustion residual units across the United States; that role has now been modified. The WIIN Act allows for a Federal Administrator to approve state programs for the regulation of coal combustion residual units.

Any state that wants to administer coal combustion residual regulations must submit to a Federal Administrator evidence of a permit program (or other system of prior approval and conditions). Once the Federal Administrator approves the permit, the enforcement of the regulation of coal combustion residual units is executed by the state.

The enforcement of regulations of coal combustion residual units by any state that is approved for a state permit program replaces the Code of Federal Regulations normally implemented by a Federal Administrator. If any state does not want to be the enforcer of regulations for coal combustion residual units within its borders, a Federal Administrator becomes responsible for implementing the regulations for that state, under part 257 of title 40 of the Code of Federal Regulations.

Geosynthetics market outlook 2016–2017

  • Increase in growth of the geosynthetics market through continued industry efforts to improve and promote the benefits of geosynthetic usage to state DOTs.
  • Continued efforts to educate civil engineers about the benefits of geosynthetic usage compared to traditional building materials.
  • The value of public highway, street and related work by state DOTs and local governments decreased by almost 2 percent in 2016; it is expected to decline by 1 percent in 2017.
  • The public bridge and tunnel construction market is expected to decline by 1 percent in 2017 to $32.9 billion—down from a record $33.3 billion in 2016.
  • Public transit and rail construction is expected to grow from $19.3 billion in 2016 to $20.3 billion in 2017, a 5 percent increase.
  • The value of airport construction will grow slightly in 2017—from $13.1 billion in 2016 to $13.2 billion in 2017—almost a 1 percent increase.

Geosynthetics in law

The original Water Resources Reform and Development Act (WRRDA) was signed by President Obama in June 2014; it was important because it included the first-ever geosynthetics language in a U.S. law—a long-sought collective effort by the Geosynthetic Materials Association (GMA) and its allies. The law provided funds for flood control, water navigation, storm damage reduction, ecological restoration, water supply, dam and levee safety and related needs.


Tarpaulins and truck covers (also known as truck tarps) are unique product segments. Truck covers are designed to fit a specific type of load and truck. They’re custom made and designed to cover and protect freight on different types of trucks for transportation applications. Applications for tarpaulins range from hay tarps to tarps used in the waste industry.

The U.S. and Canadian tarpaulin and truck cover market increased 4.5 percent in 2016 and is projected to grow 5 percent in 2017 as the U.S. economy gradually improves. In a survey of IFAI tarpaulin members and nonmembers in October 2016, respondents cited a number of trends and their impact on the 2016 U.S. tarpaulin and truck cover market, detailed below.

Industry outlook

Screen Shot 2017-02-24 at 8.47.46 AMIn the IFAI tarpaulin survey, respondents reported that they expect sales to be somewhat better in 2017 than they were in 2016. Market developments respondents feel will influence sales in the tarpaulin and truck cover market in 2017:

• The transportation construction market achieved 4 percent growth in 2016; continued growth will continue to fuel demand for lumber, poly and mesh tarps in 2017

• Tarp repair work continues to be a stream of revenue for tarp/truck cover shops

• The U.S. tarpaulin/truck cover market remains very competitive—especially in terms of lowering prices to win sales opportunities; unfortunately, these price reduction tactics sometimes narrow profit margins

• Tarpaulin/truck cover businesses will continue to experience a shortage of skilled truck drivers—especially if the construction market remains moderately strong, which would likely escalate the demand for truck drivers in 2017

Picture1It’s likely that the new administration in Washington will attempt to foster a more pro-business atmosphere in the U.S. in 2017; one that lowers the cost of business while increasing sales for domestic manufacturers. It’s also possible that the U.S. will be assessing higher tariffs on imported products—like tarps from countries such as China, Korea and Vietnam, to mitigate the negative impact of inexpensive imports.


The U.S. and Canadian industrial fabric equipment manufacturer market includes fabric equipment for a wide variety of purposes, including cutting, heat sealing and welding, labeling and marking, grommeting, pattern-making, printing, sewing, slitting, testing and tables for cutting and sewing.

In terms of value, the U.S./Canadian equipment manufacturer market was $565 million dollars in 2016, an increase of 3.5 percent from sales in 2015. The market is expected to grow by 4 percent in 2017—reaching $588 million dollars. In a survey of IFAI equipment manufacturer members in October 2016, respondents reported the top end product markets they served in terms of sales in 2016. The results are shown in the graph below.

Outlook 2017

Screen Shot 2017-02-24 at 8.50.11 AMIn the survey, equipment manufacturers reported that they expect sales to be slightly better in 2017 than they were in 2016. An increase in the automation of equipment—especially sewing—continued through 2016 and is expected to continue into 2017; this trend has helped to save labor costs, contributing to improved sales and profit margins for industrial equipment manufacturers. Another benefit from the automation trend has been increased productivity and the ability to better serve expanding market segments such as filtration and soft signage.

The automotive and wearable electronics markets present promising growth opportunities for equipment manufacturers now and into the future. Inexpensive equipment imports continued to corral sales opportunities away from U.S. equipment manufacturers in 2016; this trend will continue for the foreseeable future—depending on the impact from trade protection actions expected to be taken by Washington in 2017.

Economic and political uncertainty will be an issue in 2017 for equipment manufacturers, as in other markets. On the up side, there is a strong certainty that the new administration will attempt to deliver on its pledge to foster economic support for U.S. businesses by employing tactics such as corporate tax cuts and reducing red tape to drive job growth, as well as strong trade protectionism—high tariffs on imports from countries like China and Korea. Upcoming foreign policy is likely to advocate the withdrawal of the U.S. from trade agreements like the North American Free Trade Agreement (NAFTA) and the Trans-Pacific Partnership (TPP).

The Future

Screen Shot 2017-02-24 at 8.52.32 AMThe U.S. and the rest of the world have experienced slow, gradual economic growth in GDP since the recession of 2009. The lethargic economic recovery across the world has made kick-starting the expansion of the specialty fabrics industry a challenge, exacerbated by predictions that the malaise in GDP across the globe could last another 5-6 years.

The leading-edge pioneers in the specialty fabrics industry are well aware of the growth challenges the industry faces now and in the future. Many of you have invested substantial resources—time, money, materials, labor and leading-edge technology—in your companies each year to ensure continued relevancy to your customers in the long run.

The pioneers of the U.S./Canadian specialty fabrics industry regularly work to reinvent their business models for competing in their respective markets. To remain a leading force in the industry, any business must perpetuate a business climate centered on an unending pursuit of innovation. Innovation permeates every aspect of a business—the technologies, markets served, products and services created and delivered to increasingly demanding customers.

The innovative applications incorporated into products delivered to the marketplace are the most important market drivers specialty fabrics companies can employ to expand business and the industry over the long run. Examples include shade products with built-in UV protection to protect people (and especially school children) from skin cancer—multifunctional fabrics that also provide durability, water repellency and incorporate eye-catching aesthetics and graphics. Smart and interactive technologies are not limited to sports apparel or medical products; smart structures are already being designed for interior comfort and exterior durability. Companies that continuously embrace and deliver innovation in all aspects of their businesses are building brands that give them credibility in the industry while cementing long-term relationships with loyal customers.

Jeffrey C. Rasmussen is IFAI’s market research manager:, +1 651 225 6967.

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