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[Market Observation] Development Of Major Global Textile And Clothing Retail Markets In The First Quarter

2024/6/17 18:11:00 1

Retail Market

Since 2024, the world economy has recovered slowly and inflationary pressure remains, but the overall development is expected to be good. According to the 2024 World Economic Situation and Outlook released by the United Nations on May 16, since this year, major economies in the world have avoided a serious recession. Inflation levels have decreased under the condition of relatively stable job markets. The development prospects are cautiously optimistic. It is expected that global GDP will grow by 2.7% in the whole year. Among them, the US economy is still growing at a high interest rate, with an expected growth rate of 2.3%; China's economic growth was raised to 4.8% with the support of sound monetary policy and proactive fiscal policy; Europe's economic recovery has slowed down due to geopolitical tensions, debt risk accumulation and other factors, and its economic growth has been reduced to 1%.

The overall consumption power of the global market is weak, and the overall performance of the major textile and clothing retail markets in the first quarter was flat, not significantly boosted. However, the inflation rate of some major economies in the United States and Europe has declined, and the macroeconomic and consumer markets are showing signs of improvement. The follow-up trend remains to be further observed.

Retail sales in key markets in North America

Clothing and apparel retail in the United States performed steadily. Since the beginning of this cycle of interest rate increase in March 2022, the Federal Reserve has raised interest rates 11 times in total, and has not yet taken any interest rate reduction measures. The core inflation rate excluding food and energy in the United States has shown a downward trend in the past year, falling from 5.6% in April 2023 to 3.8% in April this year, but it has never fallen below the 3% expected by the Federal Reserve, and the inflation pressure remains.

Under the condition of long-term inflation and high interest rates, the growth of American people's consumption demand is still basically good. The consumption of residents, including clothing, will remain flexible throughout 2023, and the stable job market is an important supporting factor. In 2023, the retail sales of clothing and apparel (including footwear, the same below) in the United States will total $312.73 billion, up 1.6% year on year. Since 2024, the performance of clothing and apparel retail in the United States has remained relatively stable, with retail sales from January to March reaching US $67.54 billion, up 3.4% year on year; In March, the retail sales of the month were $26.04 billion, up 1.4% year on year and down 1.6% month on month.

The Canadian market tends to be weak. Influenced by the continuous interest rate increase in the past two years, Canadians have become more cautious in their consumption attitude and their per capita consumption expenditure has decreased. In March this year, the overall retail sales in Canada increased by 1.9% year on year to CAD 66.44 billion (about US $48.62 billion), a decrease of 0.2% month on month. The retail sales of seven of the nine sub industries, including furniture, electronic products, clothing and accessories, declined in the current month. In the first quarter, the retail sales of clothing and accessories in Canada showed a monthly downward trend. In March, the retail sales of clothing and accessories in Canada reached $2.62 billion (about $1.92 billion), a year-on-year decrease of 3.5% and a month on month decrease of 1%.


   Retail sales in key European markets

According to the data released by Eurostat, the EU's gross domestic product (GDP) grew 0.3% month on month in the first quarter of 2024 after entering a slight recession in the second half of 2023. Among them, the GDP of Germany, the largest economy in the EU, grew 0.2% month on month in the first quarter, while that of France, Spain and Italy grew 0.2%, 0.7% and 0.3% month on month respectively. In April, the inflation rate in the euro area was 2.4%, the same as that in March. With the steady easing of inflation pressure, the European economy shows signs of slow recovery, and the textile and clothing retail market in some countries has slightly improved.

The vitality of the French market needs to be released. Since 2024, the inflation rate of France has continued to decline (the inflation rate of France in April was 2.2%, compared with 5.9% in the same period last year), while wages have kept rising. At present, the French people still maintain a high level of savings, their consumption intention is relatively conservative, and their consumption potential needs to be further stimulated and released. In the first quarter, the consumption of textiles, clothing and leather products in France reached 12.23 billion euros (about 13.27 billion dollars), a slight decrease of 0.6% year on year. In March, textile and clothing related consumption increased by 0.9% year on year and 1.36% month on month.

The UK market recovered slightly. According to the data released by the British National Bureau of Statistics, the UK GDP in the first quarter of 2024 increased by 0.2% year on year and 0.6% month on month, the highest growth record in two and a half years, and the economy temporarily reversed the trend of recession. In April, Britain's inflation rate fell to 3.2%, further easing the pressure. In the first quarter, the retail sales of textiles, clothing and footwear products in the UK rose month by month, reaching 13.94 billion pounds (about 17.76 billion dollars), down 1.1% year on year. In March, the retail sales of textiles, clothing and footwear products in the UK were 5.41 billion pounds (about 6.89 billion dollars), up 0.5% year on year and 26.6% month on month.

Clothing retail sales in the Netherlands remain on the rise. In the first quarter of 2024, the GDP of the Netherlands decreased by 0.1% year on year, and the growth rate changed from positive to negative compared with the previous quarter. Over the same period, clothing retail sales in the Netherlands basically maintained a steady growth, with year-on-year growth rates of 4.6%, 0.3% and 9% in the first three months, which promoted the increase of the overall retail sales.


   Retail sales in key markets in Asia

The Japanese market continues to be depressed. The preliminary statistical results released by the Japanese Cabinet Office on May 16 showed that Japan's GDP fell by 2% in the first quarter of this year. Personal consumption fell 0.7% month on month, showing a negative growth trend for four consecutive quarters. The downturn in household consumption has become an important factor that has slowed down economic growth. In March, Japan's core inflation rate reached 2.6%, rising year-on-year for 31 consecutive months. The devaluation of the yen has led to the intensification of imported inflation, the increase in prices has exceeded the increase in wages, the consumer demand of the people is insufficient, and the economic growth is at a standstill.

In the first quarter of this year, Japan's retail sales of fabrics, clothing and accessories reached 1948 billion yen (about 12.43 billion US dollars), a year-on-year decrease of 5.2%. Among them, clothing related retail sales in January fell 8.3% year on year; In February, the year-on-year decrease was 3.3%, and the month on month decrease was 22.2%; In March, it decreased by 3.5% year on year and increased by 27.6% month on month.

China's domestic demand grew steadily. In the first quarter of 2024, China's GDP will grow 5.3% year on year, and the total retail sales of consumer goods will grow 4.7% year on year. The economic operation will continue to pick up. The retail potential of clothing has been released steadily, and the consumption of textiles and clothing has grown steadily. From January to April, the retail sales of clothing, shoes and hats, knitwear and textiles by units above the designated size in China reached 471.7 billion yuan, up 1.5% year on year, but in April, the retail sales of clothing by units above the designated size fell 2% year on year. The new e-commerce models such as live streaming with goods have played a significant role in driving the growth of online consumption. From January to April, the retail sales of online clothing products nationwide increased by 10.5% year-on-year, which slowed down by 3 percentage points compared with the same period last year.


   Retail sales in key markets in Oceania

The Australian market grew slightly. Affected by the rising prices of food, medical care and housing, Australia's inflation rate rose to 3.6% in the first quarter of this year, exceeding market expectations. Inflation is still a key challenge facing the country's economy. In the first quarter, the retail sales of clothing, footwear and personal products in Australia were A $8.99 billion (about US $5.96 billion), up 0.7% year on year.

The New Zealand market has not yet recovered. According to the New Zealand Bureau of Statistics, the inflation rate of New Zealand in the first quarter of this year dropped to 4% from 4.7% in the fourth quarter of last year, the lowest level in nearly three years, but the restraining effect of high prices on consumption has not dissipated. Over the same period, the retail sales of clothing, footwear and accessories in New Zealand were NZ $1.19 billion (about US $730 million), down 2.1% year on year.


   Retail sales of key markets in other regions

   South America – Brazil

According to the latest GDP monitoring report of FGV Ibre, a well-known Brazilian think tank, Brazil's economy grew 0.7% month on month in the first quarter of this year, up 2.3% year on year, making a good start. Since the beginning of this year, Brazil's inflation rate has been declining from 4.51% in January to 3.69% in April. With the easing of inflation, retail sales in the market increased, and the overall retail sales from January to March increased by 4.1% to 8.2% year on year. However, the retail sales of fabrics, clothing and shoes in Brazil were flat. After a slight year-on-year increase of 0.7% in January, they decreased by 0.5% and 0.9% respectively in February and March.

   Africa – South Africa

In April this year, South Africa's inflation rate reached 5.2%, slowing for three consecutive months, but still higher than the target set by the Bank of South Africa. In the first quarter, the retail sales of textiles, clothing, footwear and leather goods in South Africa performed poorly. From January to February, the retail sales of textiles and clothing in South Africa fell by 6.5% and 6.8% respectively year on year. In March, the retail sales rose slightly, reaching 15.86 billion rand (about 860 million US dollars).

(Source: China Textile International Capacity Cooperation Enterprise Alliance)

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