TCF POST Report
ZURICH — The global textile industry entered the second half of 2026 on a softer footing, with business conditions weakening and order intake falling sharply, although expectations for the coming six months remain cautiously positive.
The latest 39th ITMF Global Textile Industry Survey (GTIS), conducted from July 14 to 22 among companies across the global textile value chain, found that only 10% of respondents described their business situation as good, while 53% rated it satisfactory and 37% considered it bad. The resulting business balance fell to -26 percentage points (pp) from -17pp in May.
The deterioration suggests that the industry’s recovery remains fragile. While the current situation is weaker than in May, ITMF said the balance remains considerably above the lows recorded during 2023.
Garment producers move sharply into negative territory
The pressure is spreading unevenly across the textile value chain.
Garment producers recorded one of the sharpest deteriorations, with their business balance plunging from +5pp in May to -25pp in July. Machinery manufacturers were even weaker at -40pp, making them the worst-performing segment in the survey.
By contrast, brands and retailers remained the only segment with a positive business balance, at +11pp. The divergence points to a continuing imbalance within the supply chain, with downstream companies maintaining comparatively stronger positions while production-facing businesses experience softer demand.
South Asia among the most resilient regions
All regions registered negative business balances in July, but the degree of weakness varied substantially.
South Asia recorded the least negative balance at -3pp, compared with -58pp in North and Central America, the weakest regional result. This places South Asia in a relatively resilient position within a difficult global textile market.
The regional outlook is even more encouraging. South Asia recorded a +32pp balance for business expectations over the next six months, second only to Africa at +50pp. This suggests that companies in both regions expect current weakness to ease and market conditions to improve.
Machinery manufacturers also expressed comparatively strong forward expectations, with a +36pp outlook balance, despite their current business situation being the weakest among the surveyed segments.
Order intake signals renewed demand pressure
The survey’s order indicators provide a more cautious reading of near-term market conditions.
Global order intake dropped to -27pp in July from -9pp in May, with ITMF describing the May result as an outlier. The decline indicates that companies are facing renewed difficulty converting market activity into new orders.
At the same time, the average order backlog declined to 2.3 months, while global capacity utilisation slipped to 71%.
Capacity utilisation varied considerably by region. South-East Asia recorded the highest level at 75%, while North and Central America stood at 64%. The figures underline the uneven distribution of production activity across major textile manufacturing regions.
Key global indicators
| Indicator | July 2026 | Previous/Reference |
|---|---|---|
| Business situation balance | -26pp | -17pp in May |
| Business expectations | +14pp | +16pp in May |
| Order intake | -27pp | -9pp in May |
| Average order backlog | 2.3 months | — |
| Global capacity utilisation | 71% | — |
| Order cancellations | 2% | — |
| Tariffs as a leading concern | 10% | 40% peak in Sept. 2025 |
Source: 39th ITMF Global Textile Industry Survey.
Weak demand remains the industry’s biggest challenge
Demand, rather than tariffs or input costs, has emerged as the dominant concern for textile companies.
Weak demand was identified by 56% of respondents as a leading concern, followed by geopolitical developments at 46%. Meanwhile, concerns about raw-material prices, energy costs and tariffs have receded.
The decline in tariff concerns is particularly notable. Tariffs were cited by only 10% of respondents, down from a peak of 40% in September 2025.
For textile and apparel manufacturers, this shift means that the central challenge is increasingly about securing sufficient market demand rather than simply managing trade-policy costs.
Inventory is moving downstream
Another important signal is emerging in inventory management.
Global order cancellations fell to just 2%, while the inventory index improved, although it remained below its long-term average. However, inventory accumulation is concentrated downstream, with brands and retailers building stocks while upstream segments remain relatively lean.
This creates a mixed picture for suppliers. Lean inventories upstream could allow manufacturers to respond quickly if orders recover, but continued stock accumulation at the retail end could delay fresh production commitments if final demand remains weak.
Outlook: cautious optimism rather than a broad recovery
Despite the deterioration in current conditions, the global textile industry’s six-month outlook remains positive.
The business expectations balance eased only slightly, from +16pp in May to +14pp in July, while 47% of respondents expected no change. Africa posted the strongest expectations balance at +50pp, followed by South Asia at +32pp.
The survey therefore points to a textile industry caught between weak present conditions and improving expectations.
For textile and apparel sourcing markets, the most important signals are the relatively strong outlook in South Asia and Africa, higher capacity utilisation in South-East Asia, and the sharp deterioration among garment producers. If demand improves during the second half of 2026, these regional differences could influence where buyers place incremental production.
For now, however, the global industry remains in a defensive phase: orders are weak, capacity is underutilised and downstream inventories are still elevated, but manufacturers retain some confidence that conditions can improve over the next six months.