Challenges facing the global textile industry in 2023

Challenges facing the global textile industry in 2023

Translated by

Nicola Mira

After two pandemic-stricken years, textile and apparel manufacturers were hoping to be able to catch their breath in 2022. But then Russia invaded Ukraine, and manufacturers are now facing fresh challenges putting their already stressed cash positions under pressure, from the energy crisis to fluctuating raw materials prices to the global supply chain’s transformation.


Energy supplies at risk

Electricity and gas are at the heart of European textile manufacturers’ concerns as 2023 is about to begin. Default risks are at their highest, while some factories are urgently trying to equip themselves with solar panels. The gas and electricity crisis is also a source of tension within the European textile industry: some countries, like Spain and Portugal, have been able to decouple electricity prices from gas prices, so as to minimise energy bill increases. A distortion of competition that is causing for example French producers to gnash their teeth in anger.

Moreover, while the pandemic brought virtually to a halt the entire textile and apparel sector, the current energy crisis is concentrated in Europe, accentuating the price gap between the latter and other major sourcing regions. Without sizeable state intervention, declarations of industrial sovereignty notwithstanding, manufacturers believe that a scenario featuring a massive new wave of sourcing delocalisation is no longer to be ruled out.

Raw materials choice and prices

Meanwhile, the crisis in transportation and raw materials prices is by no means over for the industry. The Harpex index for the cost of container ship charters remains still almost 100% above the level observed in January 2020.

Textile Exchange

On the raw materials side, the invasion of Ukraine caused worrying price fluctuations during 2022. Synthetic fibres currently account for almost two thirds of global textile fibre output, having had the lion’s share since the cotton crisis of 2010-11. While prices have gradually diminished again, most of them have reached a new normal, at levels above pre-crisis ones.

The global geopolitical context remains uncertain and, now more than ever, textile buyers are faced with a need to shift towards natural materials, which consumers say they are calling for. A demand that must however come to terms with the cotton industry’s current woes. Besides, there are suspicions swirling around highly sought-after organic cotton, which accounted for 24% of all cotton produced in 2021. The Textile Exchangeabout the unexplained gap between volumes produced and the volumes fashion labels claim

Transformation of global sourcing

Rising raw materials costs are also beginning to leave traces on the international sourcing map. Enmeshed in the scandal of its treatment of Uighurs, and because of the inconsistency in output volumes caused by the zero-Covid policy, China is seeing Western orders shift towards its neighbours.


Bangladesh, Pakistan, India, Myanmar and Vietnam have benefited from the situation, but China began easing its Covid restrictions in December 2022, and this may well change the outlook for 2023. 

Buyers, caught between a desire to source closer to home and the pragmatic impulse to minimise the budgetary impact of rocketing costs, are therefore faced with complex choices at the start of 2023.

Orders are increasing more in value than in volume, so that manufacturers are beginning to worry that volumes will continue to stagnate even when production costs will eventually fall. A scenario that would undermine their profitability. 

Inflation has final say

Challenged in terms of energy, raw materials and sourcing, the textile industry is also facing the ultimate arbiter in times of crisis: consumers. Deconsumption as a choice, made by individuals wishing to consume less but better, is now going hand in hand with the forced deconsumption triggered by inflation. Apparel and footwear are no longer priorities for consumers. A reality whose impact will eventually be felt across the entire textile and apparel supply chain.

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