The slowdown in the Italian textile and apparel sector, witnessed in H1 2024 has intensifiedin H2 2024 with the purchasing power of consumersdeclining and geopolitical tensions rising.
As per a report by the employer’s federation for the Italian fashion industry, SistemaModa Italia (SIMI),only 17 per cent of the entrepreneurs reported revenue increases in the first six months of the year. The average sales of these entrepreneurs also decreasedby 5.8 per cent compared to the same period in 2023.
Most industry players do not expect revenues to improve in the second half of the year. Around 48 per cent respondents say, they anticipate market conditions to stabilise in H2, FY24 while 33 per cent anticipate market conditions will deteriorate in the second half of the year.
Conducted in early July among small and medium-sized enterprises (SMEs) across various regions, the surveyshows, only 19 per cent of companies expect sales to increase for the rest of the year. Meanwhile, 61 per cent anticipate a slowdown, and 20 per cent expect stable sales. As per SMI’s prediction, revenues from the textile and apparel sector areexpected to decline by 6.2 per cent during the first nine months of FY24.
Around 64 per cent of entrepreneurs predict, they will end 2024 below 2023 levels, while only 11 per cent hope sales will improve during the rest of the year. A majority, 70 per cent, do not expect recovery until early 2025.
Employment levels in the sector remain relatively stable, according to 54 per cent of entrepreneurs. However, 20 per centreport staff reductions, and 26 per cent have used social safety nets in the second quarter. This trend is expected to intensify, with 33 per cent of companies planning to use social safety nets in the third quarter.
Sergio Tamborini, President, SMIemphasises, the sectors needs to introduce targeted measures to invigorate the production chain and strengthen strategic relationships with Europe and key markets. An urgent strategic plan to preserve Italy's creative, human, and industrial capital needs to be formulated, he adds.
