Economic Observation: Data Analysis Of The Dynamic Trend Of Major Global Textile And Clothing Retail Markets

Since this year, the global economy has generally maintained steady growth and inflation has been well controlled. However, geopolitical conflicts and the rise of trade protectionism have combined to increase the downside risk of the global economy. According to the updated report of World Economic Situation and Outlook released by the International Monetary Fund (IMF) on October 22, the global economic growth will slow to 3.2% in 2025. Among the major economies, the consumption of American residents has shown strong resilience, providing support for the soft landing of the economy. It is expected that the economic growth will be 2.8% next year. For the euro area, the economic outlook is limited due to the continued downturn in the manufacturing industry in Germany and Italy, and the economic growth forecast is lowered to 1.2% next year. China's economic growth is expected to remain at 4.5% next year, driven by a series of effective economic stimulus measures.

Since this year, various countries have taken a series of measures to control inflation, which has generally promoted the gradual improvement of the macro level of the economy. Although there are insufficient highlights of global consumer demand, it has generally maintained a certain resilience, and the textile and clothing retail markets of major developed economies are generally stable. With the decline of inflation, the central banks of many countries began to loosen monetary policies after the second quarter, but it remains to be seen whether the liquidity recovery can continue to play a role in activating the textile and clothing retail market in the future.

Key markets in North America

In the third quarter of this year, inflation in the United States showed a steady downward trend. The inflation rate gradually decreased from 3.5% in March to 2.4% in September, approaching the regulatory target of 2%, but the employment level fell more than expected. In response to the risk of economic recession, the Federal Reserve sharply cut interest rates by 50 basis points in September.

Under the combined effect of wage growth, fiscal expansion and declining inflation, the real income of the American people has increased, driving clothing consumption to remain resilient. From January to September this year, the retail sales of clothing and apparel (including footwear, the same below) in the United States totaled $234.24 billion, up 2% year on year. In September, the retail sales of American clothing and apparel were 26.29 billion US dollars, up 2.8% year on year and 0.9% month on month.

As the "pioneer" of this round of monetary easing cycle, the Bank of Canada has cut interest rates for four consecutive times since June 2024. In September, Canada's inflation rate dropped to 1.6%, marking the end of high inflation in the post epidemic era and creating a more favorable environment for the country's economic stability.

In the first half of this year, the year-on-year growth rate of clothing retail sales in Canada continued to be negative. With the gradual effect of monetary easing policy, the retail sales of clothing have recovered since June. In September this year, the retail sales of clothing and accessories in Canada reached 3.55 billion Canadian dollars (about 2.53 billion US dollars), up 3.5% year on year and 0.8% month on month.

European key markets

According to the data released by Eurostat, in the third quarter of this year, the GDP of the euro zone grew by 0.4% month on month and 0.9% year on year. Although slightly improved from the second quarter, the overall economic performance was still lower than expected. Against the background of increasingly complex external environment, the negative spillover effects of geopolitical conflicts and trade frictions and other factors continue to restrain the economic growth momentum of the euro area.

The sharp drop in energy prices has led to the overall downward movement of the inflation hub in the euro area. In September, the inflation rate in the euro area fell to 1.7%, which was the first time in three years that it was lower than 2%. Driven by lower inflation in Europe and continued weak economic activity in the euro area, the European Central Bank cut interest rates for the third time this year in October, aiming to further stimulate the recovery of consumption.

In September this year, the inflation rate in France dropped to 1.1%, while the wage level still kept growing. In the third quarter, the consumption of textiles, clothing and leather products in France reached 12.41 billion euros (about 13.06 billion dollars), up 2.2% year on year. Affected by the cold weather and rainy season, textile and clothing related consumption picked up significantly in September, up 8.8% year on year and 6.2% month on month. Since the epidemic, the consumption mentality of French people has changed, and the household savings rate has continued to increase. The next step of normalizing inflation may boost the confidence of local consumers and lay the foundation for releasing residents' purchasing power.

According to the data from the Office for National Statistics, the UK economy grew 0.7% month on month in the first quarter of this year, but since then the growth has gradually slowed down, and the GDP in the third quarter grew only 0.1% month on month. In September, Britain's inflation rate was 1.7%, the lowest level in three and a half years. Under the background of sluggish economic growth and high living costs of residents in the UK, the falling inflation provides favorable conditions for the Bank of England to implement interest rate reduction policy.

In the first three quarters, the retail sales of textiles, clothing and footwear products in the UK rose month by month, totaling 14.19 billion pounds (about 18 billion dollars), a slight increase of 0.7% year on year. In September, UK textile and clothing related retail sales increased by 3% year on year and 25.6% month on month.

According to the data of the Netherlands Central Bureau of Statistics, thanks to the growth of household consumption (including clothing consumption) and government expenditure, Dutch GDP in the third quarter of this year grew 0.8% month on month, 1.7% year on year. Over the same period, the Dutch clothing retail sales maintained a positive growth, with year-on-year growth rates of 4.4%, 2.3% and 8.3% respectively from July to September, driving the overall retail sales up.

Key markets in Asia

The preliminary statistical results released by the Japanese Cabinet Office recently show that the Japanese economy grew 0.9% year-on-year in the third quarter of this year, and has achieved positive growth for two consecutive quarters. Among them, personal consumption, which accounts for more than half of the total economy, grew 0.9% month on month, maintaining an upward trend for the second consecutive quarter. In September, Japan's core inflation rate slowed to 2.4%. Steady wage growth provided strong support for consumption, and Japanese residents' consumption continued to recover.

In the first half of this year, the year-on-year growth rate of Japanese textile and clothing retail continued to be negative. With the gradual recovery of consumer demand, the relevant retail sales in June turned from negative to positive. In the third quarter of this year, the retail sales of fabrics, clothing and accessories in Japan reached 1984 billion yen (about 13.17 billion US dollars), an increase of 5.8% year on year, significantly faster than the previous two quarters. Among them, the year-on-year growth rate of clothing related retail sales in August and September reached 10.9% and 10.8% respectively.

Since this year, the supply side of China's textile industry has gradually recovered. Thanks to the implementation of the government's consumption promotion policy, the overall textile and clothing retail market has shown a growth trend. However, the consumption momentum is still insufficient, and the growth rate has slowed down. From January to September, the retail sales of clothing, shoes and hats, knitwear and textiles above the designated size nationwide reached 1022.5 billion yuan, an increase of 0.2% year on year, and the growth rate dropped by 10.4 percentage points compared with the same period last year. Since the retail sales of clothing related goods bottomed out in July, the retail sales of clothing, shoes and hats, and knitwear and textiles above the designated size nationwide reached 134.7 billion yuan in October, up 8.0% year on year.

The trend of online and offline integrated development has brought new opportunities to the clothing retail industry, and the new retail model represented by live broadcast with goods is becoming an important driving force for industry development. In the first three quarters of this year, the retail sales of online clothing products increased by 4.1% year on year, demonstrating the positive role of the new retail model in stimulating consumption vitality.

Key markets in Oceania

Affected by the decline in energy prices, Australia's inflation rate fell to 2.8% in the third quarter, a new low for three and a half years. In the same period, the retail sales of clothing, footwear and personal products in Australia amounted to A $9.07 billion (about US $5.9 billion), a slight decline of 1.3% year on year.

According to the New Zealand Bureau of Statistics, the inflation rate of New Zealand fell back to 2.2% in the third quarter of this year, providing support for the Bank of New Zealand to further implement a large-scale interest rate cut in November. In the same period, the retail sales of clothing, footwear and accessories in New Zealand were NZ $1.11 billion (about US $650 million), down 4.4% year on year, and the decline was further expanded compared with the previous two quarters. New Zealand clothing retail industry urgently needs policy support or market stimulus to accelerate recovery.

Key markets in other regions

In September this year, affected by the rising food and housing prices, Brazil's inflation rate rose to 4.4%, higher than 4.2% last month. Inflation pressure remains. From January to September, the retail sales of fabrics, clothing and footwear in Brazil showed a fluctuating upward trend. After the year-on-year growth reached a peak of 5.8% in August, the growth of clothing related retail slowed down significantly in September, with a year-on-year growth of only 0.7%.

In September, South Africa's inflation rate was 3.8%, the lowest level in nearly four years. The decline in fuel prices was the main reason for the slowdown in inflation. In the first three quarters, the retail sales of textiles, clothing, footwear and leather goods in South Africa fluctuated, and there was a lack of significant growth overall. In September, the retail sales of textiles, clothing, footwear and leather goods in South Africa were R13.83 billion (about US $760 million), down 5.5% year on year, further deepening the decline. Although the decline in inflation helps to increase the purchasing power of consumers, the current structural problems such as weak economic growth and high unemployment rate in South Africa still pose challenges to the clothing retail industry, restricting the pace of market recovery.

(Source: China Textile International Capacity Cooperation Enterprise Alliance)