Textile Industry Review & Outlook - June 2021

After a year of dealing with the challenges of a global pandemic, the textile industry is finally finding its feet again. Consumer spending habits are on the rise, and the demand for textiles is slowly increasing. We also see a shift towards a greener economy as the rights of workers are questioned. As we reach the middle of 2021, we look at how the industry is performing worldwide and the future of the sector.
Textile industry finds its feet again
June has been an excellent month for the textile industry as we make our way out of the global pandemic. Western countries are rolling out vaccination programs, and government restrictions are lifting. This has seen a steady increase in demand for garments and home textiles, further bolstered by the spare money many consumers have from over a year of saving on vacations and entertainment.
This increased demand from Western markers has helped keep other industries afloat. For example, India’s merchandise exports in June 2021 were worth $32.46 billion, reflecting an increase of 47.34% year-on-year and a rise of 29.7% from June 2019’s pre-pandemic $25.03 billion. From June 2019 to June 2021, the yarn and fabric export accounts for 23.66% of this upward trend. According to one forecast, the trend continues worldwide and should see the global textile market grow at a rate of 8.0% from the years 2021 to 2029.
However, as the industry resets, it’s essential to notice the subtle changes in demand. Consumer preferences have moved from predominantly lifestyle towards health and personal care. This has seen a shift in fiber production, with many textile producers exporting more materials with microbial resistance and brands using such fabrics in a wider range of products. There is also a significant change in consumer attitudes, with more buyers assess the socio-economic impact of their purchases and show a local shopping preference.
Market driven by technology & innovation
If it were not for the support of technological advancements, the reviving of the textile industry might not have been as successful. Technology is being utilized in the industry in several different ways. Firstly, the use of blockchain-enabled supply chain traceability platforms is teaching manufacturers, brands, and consumers about the origin and journey of their products. This fits with the consumer shift towards sustainable fashion and shopping choices. It is also helping businesses to make intelligent decisions when creating their supply chains and dealing with pandemic-related disruptions more efficiently. Furthermore, with the rise of eCommerce, many companies rely on artificial technology to boost their online sales and business models.
Technology is also being used in the production of the materials themselves to create novel fabrics. For example, start-up company Modern Meadow is creating an eco-friendly lab-grown leather made without harming any animals. Even tech giants like Google are finding their way into the textile industry. Their Project Jacquard from Google’s ATAP lab focuses on creating conductive threads woven into clothing, rugs, or other fabrics. When combined, this turns these materials into touch-responsive textiles. The team is also currently producing a color-changing fabric, making it possible to carry out activities on phones and tablets through clothing. This highlights how technology holds the potential to completely reshape the fashion and textile industry.
Increased risk of forced labor
While improvements are being made in the textile industry, the same cannot be said for all workers. A recent study by the UBC Global Reporting Center found that there has been a sharp decline in the income and working conditions of workers in the textile industry.
The study found that both textile workers who have remained in employment through the pandemic and those in new roles are experiencing similar poor conditions in the workplace. There is also an increased risk of forced labor, with many workers unable to leave their positions. This could be due to deception, threats against the workers or their families, or the inability to survive without their limited income. The forced labor exacerbates the inequalities from the countries benefiting from their products, showing a desperate need for improved government regulations to protect workers' rights in frontier textile industries. These findings are likely due to a backlog of rising costs from the pandemic and companies now struggling to keep to the rising demand.
Brexit-Related challenges for UK Businesses
It is not only laboring countries and textile producers feeling the pressure. As the UK eases out of pandemic-related government restrictions, the country faces new challenges with Brexit. According to the UK Fashion & Textile Association (UKFT) survey, 92% of fashion businesses who took part are experiencing increased freight costs, and 83% have increased costs related to customs clearance. Overall, 74% state they are experiencing increased costs generally associated with Brexit. Of these businesses, the vast majority said they are looking to pass these additional costs onto consumers, which could have rippling effects on the supply chain.
What’s more, although the UK is six months into the post-Brexit trade deal with the EU, Brexit’s impact is far from over. The government has given a grace period to ease the impact on the UK’s textile industry that was still recovering from the pandemic. They have implemented a phased introduction of customs which won’t be fully in place until January 2022. Therefore, the country is still seeing the impact play out now. The second half is set to see more struggles, with prices increasing further and more supply chains being disrupted.
Therefore, while the textile industry is finally escaping from the grasp of COVID-19, it is far from smooth sailing. A lot is riding on the next few months, especially with the UK market and its response to Brexit deals. Inequalities and forced labor are also huge rising issues. With consumer shifts forwards ethical and sustainable production of fabrics, this is a problem that governments, brands, and businesses must consider for a successful future.