The global textile industry is grappling with a sudden and severe downturn in sentiment as regional conflicts disrupt essential trade routes and energy markets. According to the 37th Global Textile Industry Survey by the International Textile Manufacturers Federation (ITMF), the business situation balance has plunged to -25 percentage points. This decline is largely attributed to the escalating conflict involving the US, Israel, and Iran, which has revived stagflation fears reminiscent of the 2022 energy shocks. While Africa remains a rare bright spot of stability, North and Central America have experienced the most significant contraction in business conditions.
Energy security and logistics disruptions reshape industry risk
For the first time in recent history, geopolitical instability has overtaken weak consumer demand as the primary concern for textile executives, cited by 50 per cent of survey respondents. The blockade of the Strait of Hormuz has sent shockwaves through the supply chain, driving up raw material costs and complicating logistics. Consequently, global business expectations have collapsed from a robust +23 percentage points to just +5—the lowest level recorded since late 2022. While brands and retailers maintain a cautious optimism, the outlook for upstream manufacturers, particularly weavers, knitters, and machinery producers, has turned deeply negative.
Strategic diversification amid rising operational costs
In response to these external pressures, the industry is pivoting toward market diversification to reduce over-reliance on the US market. Manufacturers are currently prioritizing internal cost absorption over large-scale capital investments or production relocation. Interestingly, as energy and security concerns dominate the narrative, the anxiety surrounding trade tariffs has diminished significantly, falling from 31 per cent to 13 per cent. This shift underscores a fundamental realignment where immediate physical and economic security now outweighs traditional regulatory or protectionist hurdles in the global textile world.
