Economic studies
Textile - Clothing

Textile - Clothing

Latin America
Northern America
Central & Eastern Europe
Western Europe
Mid-East & Turkey
Change sector


  • Growth of the middle class in emerging countries
  • Interest in “fast fashion”, especially in Asian countries


  • Product with high price elasticity of demand
  • Structure of selling prices very sensitive to fluctuations in commodity prices

Risk Analysis



Cotton production accounting for 77% of world production of natural fibres in 2017, this commodity is at the centre of the development of the textile-clothing sector.

Reduced Chinese demand for cotton is expected to impact global cotton demand in the 2018/2019 season through two main channels: China’s policy of limiting cotton imports in order to reduce domestic stocks (which accounted for 62% of world cotton stocks in 2014/2015), and the customs duties imposed by China on US cotton exports in retaliation for the customs duties imposed by the United States on China since the beginning of last year, which now stand at 25%.

Sales in the global clothing market are expected to slow slightly in 2019: the McKinsey Global Fashion Index forecasts clothing sales to increase by between 3.5% and 4.5% in 2019 after an estimated rise of between 4% and 5% in 2018. The slowdown would be due to both the global economic slowdown and ongoing trade tensions.

The textile sector is evolving: while cotton has traditionally been widely used, the industry is seeing an increasing use of synthetic fibres. For example, cotton accounted for only 43% of textile imports in the United States in 2016/2017, compared with 47% in 2011/2012, according to the USDA. Less expensive, easy to mix with other fibres, and with a smaller environmental impact than cotton, synthetic fibres are a focus for technical progress in the sector. The sharp rise in cotton prices (+60% between January 2016 and June 2018) has made synthetic fibres even more competitive in relation to cotton. However, cotton prices fell 11% between July and December 2018, which could slow the continued transition to synthetic fibres. However, cotton prices seem unlikely to decline further, due to the increase in Chinese import quotas and the decrease in world cotton production in 2018/2019.

The development of e-commerce is having a major impact on the clothing market, especially in advanced economies and China: the share of online sales is constantly increasing and is undermining brick-and-mortar shops. In the United States, for example, online sales represented 27.4% of total clothing sales in 2017, a 6.7 percentage point increase over 2015.


World cotton consumption in 2018/2019 is expected to increase by 2.8% to 28 million metric tons. China’s decision to raise its cotton import quota by 0.8 million tonnes will likely push up its imports to 1.52 million tonnes in 2018/2019 to meet growing demand driven by the rise of disposable income, living standards, population and urbanisation. The customs duties imposed by China on cotton imports from the United States will reduce US exports, which will be good for India, the world’s leading producer and second largest exporter. However, the United States has benefited for several years from rising demand from Vietnam and Bangladesh (which, together with China, are the three largest importers), whose cotton imports from the United States increased at an average annual rate of 30% and 26% respectively between 2012 and 2017.

World textile consumption is expected to be affected by cooling economic growth in advanced economies, particularly in Europe. In the United States, growth prospects – with an expansion of 2.3% forecast for 2019 after 2.9% in 2018 – and the historically low unemployment rate (3.7% in October 2018) will continue to support clothing demand, which had a robust start to 2018. However, President Donald Trump’s imposition of customs duties on imports of a basket of Chinese goods, including clothing, will dampen US consumption of clothing goods, since China manufactures 41% of the clothing consumed in the US. In Central and Eastern Europe, the economic performance of textile companies depends largely on their exports, mainly to the EU. They are therefore expected to be hit by slower growth in their main partner.

The clothing market reached a turning point in 2018 as, for the first time, sales outside Europe and North America accounted for more than half of global sales. This gap is expected to grow: by 2025, 55% of sales will likely be made outside Europe and North America.

In addition, demand for textiles has been boosted by the craze on the Asian market for “fast fashion”, where retailers produce and market new fashion collections quickly, generally at affordable prices. Responding to demand from an expanding middle class, the leading fast fashion brands, such as Uniqlo, Zara and H&M, are entering these markets in the mid-range segment. The sector is set to expand strongly, with average annual growth of around 9.5% until 2022 in Asia. Population growth in the region is expected to bolster this trend in the longer term.


The total area of land under cotton cultivation worldwide in 2017/2018 is expected to remain stable in 2018/2019 according to the USDA. However, world cotton production is expected to decrease slightly in 2018/2019, contracting by 1.5% to 26.4 million tonnes, linked to a 2.3% decrease in yield to 798 kilograms per hectare. The contraction will be largely due to poorer US harvests expected in 2018/2019 compared with the 2017/2018 season, partly as a result of the drought in the South-eastern United States early in the season. The decrease in the US cotton supply will be accompanied by a deterioration in crop quality compared to the previous season owing to bad weather conditions in 2018: the share of crops rated “very good” or “excellent”, according to the USDA, fell by 18 percentage points to 42% while the share rated “bad” or “very bad” increased by ten points to 25%.

The relative rise in labour costs in China and the sustainable development policies put in place have led many global textile manufacturers to look to other countries in the region to establish their production centres. Accordingly, Bangladesh and Vietnam became the world’s second and third largest suppliers in 2017. Bangladesh is likely to overtake China in the European market by 2020, helped by its preferential status. Similarly, Vietnam, the United States’ second largest supplier, is experiencing strong growth in textile exports to the United States, reporting a 17% increase in the first half of 2018 compared with the same period the previous year. However, exports from Cambodia, the fifth largest textile supplier to the EU, are exposed to the risk that the country may lose its preferential status with the EU due to human rights violations.


Last update : February 2019