Italian textile and apparel sector faces increased slowdown in first half of 2024

Italy, a hub for many of the world's luxury manufacturers, is already significantly affected by the economic downturn. The slowdown that began at the end of 2023 in the textile and apparel sector has continued and intensified. By mid-2024, 75% of companies saw their revenue decrease, with a quarter of them experiencing declines of nearly 20% or more. This grim picture is painted by the research office of Sistema Moda Italia, the employer's federation for the Italian fashion industry.

Economic instability, inflation, high interest rates, and rising energy costs have led to reduced consumer purchasing power, further undermined by geopolitical tensions. This challenging environment is a major concern for the Italian fashion industry, as highlighted by SMI’s survey.

Only 17% of the entrepreneurs surveyed reported an increase in their revenue in the first six months of the year. SMI thus estimates an average sales decrease of 5.8% compared to the same period in 2023. Industry players do not anticipate an improvement in the second half of the year. In fact, while 48% believe market conditions will stabilize, 33% expect further deterioration, and only 19% foresee any improvement.

The survey, conducted in early July across various regions, primarily among small and medium-sized enterprises (SMEs), reveals that only 19% of companies expect their sales to increase for the rest of the year. Meanwhile, 61% anticipate a slowdown, and 20% believe their sales will remain stable. SMI predicts that the first nine months of 2024 will close with a 6.2% decrease in revenue for the textile and clothing sector.

For the entire year, expectations remain bleak, with 64% of entrepreneurs predicting they will end 2024 below 2023 levels, and only 11% hoping for an improvement. The majority of operators, 70%, do not expect recovery until early 2025.

While employment levels in the sector, which employs nearly 300,000 people, remain relatively stable according to 54% of entrepreneurs (with an increase noted by 26% of respondents), 20% report a reduction in staff. Regarding social safety nets, 26% of those surveyed admit to having used them in the second quarter. When utilized, technical unemployment often affected a large portion of the workforce, ranging from 60% to over 80%. This trend is expected to intensify, with one in three companies (33%) planning to use social safety nets in the third quarter.

"The historic period we are experiencing presents increasing challenges for the textile and fashion industry: it is necessary to invigorate the entire production chain through targeted measures, strengthening strategic relationships with Europe and key markets," stated Sergio Tamborini, president of SMI, in a press release. He calls for "the urgent adoption of a strategic plan to preserve creative capital, human capital, and industrial technological capabilities."

The entire Italian fashion system, including leather goods and accessories, surpassed 110 billion euros in revenue in 2023, up 5% from 2022. The textile-clothing sector alone reached 64 billion euros, with 70% generated from exports, and men's fashion nearly 12 billion euros. "If we close 2024 with the same values as in 2023, we can consider ourselves fortunate," Sergio Tamborini confided in a recent interview.

Italian textile and apparel sector faces increased slowdown in first half of 2024

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