ITMF Survey: Textile Conditions Weaken in July, But Outlook Stays Positive

Global Textile Conditions Deteriorate in July

The latest International Textile Manufacturers Federation (ITMF) survey, conducted among companies across the global textile value chain in July 2026, paints a picture of an industry that has lost momentum but isn’t in freefall. The net balance of respondents rating current business conditions as good minus bad dropped to -26 percentage points, a notable deterioration from -17pp in May. While 10% of firms still called conditions good, 37% labelled them bad, with the rest seeing a satisfactory environment. All regions now sit in negative territory, though the reading remains above the troughs of 2023.

Among the value chain’s segments, garment producers suffered the most dramatic swing, sliding from a +5pp balance in May to -25pp. In contrast, brands and retailers were the only group still reporting a positive current balance at +11pp. Order intake weakened sharply to -27pp after a brief improvement to -9pp in May, while global capacity utilisation held steady at 71%. Only 64% of capacity was in use in North and Central America.

Looking six months ahead, the industry’s expectations softened only slightly, with the forward-looking balance edging down from +16pp to +14pp. Africa expressed the strongest optimism at +50pp, and machinery manufacturers were the most upbeat segment at +36pp. Weak demand and geopolitical developments were cited as the top concerns, while order cancellations fell to just 2%. The survey also highlighted an inventory divergence: downstream players such as brands and retailers are still accumulating stock, whereas upstream segments keep inventories lean.

Where Sentiment Is Cracking and Why Machinery Makers Stay Bullish

The ITMF’s July survey delivers a wealth of segment-level data that can help industry players decode shifting risks and opportunities. Below we dissect the key findings.

Garment Producers’ Sudden Downturn

The collapse in sentiment among garment manufacturers—from a positive balance in May to a deeply negative -25pp—is the most striking feature of this survey. Two months is too short a window to call a trend, but such a rapid reversal suggests that weak demand is hitting order books after a brief spring improvement. With order intake overall declining to -27pp, it’s plausible that garment makers are seeing a pullback in replenishment orders from brands seeking to avoid overstocking. Given that downstream inventory is still building, the pressure on garment producers may persist until retail sell-through improves.

Brands and Retailers Hold the Line

Brands and retailers’ +11pp current balance stands out amid widespread negativity. The survey attributes some of this resilience to still-building inventories, meaning these firms may be sitting on more finished goods than they’d like. That cushion can provide a temporary buffer against demand weakness, but it also raises the risk of markdowns later in the year if consumer spending doesn’t recover. For now, the positive reading indicates that the consumer-facing end of the chain sees enough near-term activity to stay cautiously optimistic.

Machinery Makers and Africa: The Optimism Outliers

Machinery manufacturers’ forward-looking balance of +36pp and Africa’s +50pp six-month outlook are the brightest spots. Machinery orders typically reflect longer-term investment decisions by textile mills, suggesting that capital spending plans haven’t been derailed despite the softer current environment. Africa’s booming confidence likely stems from ongoing investment in local garment production, partly driven by near-shoring trends and preferential trade agreements. For global textile firms, these figures signal that capacity expansion in emerging regions could be a growth lever.

The Inventory Tug-of-War

One tactical detail deserves attention: downstream inventory continues to build, while upstream segments stay lean. This asymmetry implies that any sudden uptick in demand could quickly strain upstream supply, while downstream players might face a glut. The low order cancellation rate (2%) suggests that contracts are being honoured, but the order intake slump (-27pp) points to future pipeline thinning. If demand doesn’t rebound, the inventory overhang at brands and retailers could eventually ripple back to producers as aggressive destocking.

For Industry Professionals: Reading the Mixed Signals

While the survey captures sentiment rather than hard order data, several actionable signals emerge for textile executives and supply chain managers:

• Garment producers should scrutinize forward order cover. The 30pp swing from positive to negative in two months raises the risk of capacity underutilisation. Reviewing order books and aligning production schedules with realistic demand scenarios can help avoid inventory write-downs.
• Brands and retailers need to watch their inventory-to-sales ratios. With downstream stocks still accumulating, a slowdown in consumer demand could compress margins via markdowns. Testing cautious reorder levels now may prevent discounting later in the season.
• Machinery manufacturers can lean into the +36pp six-month outlook. The optimism suggests mills are still investing; early engagement on financing and delivery terms could lock in orders before any broader capex pullback.
• Firms eyeing Africa should accelerate feasibility work. The continent’s +50pp outlook is the highest regional reading and aligns with growing nearshoring interest. Partnerships and capacity-building moves made now could yield first-mover advantages.
• Supply chain planners should model the inventory gap. Lean upstream stocks against building downstream inventories create a binary risk: a demand spike would strain upstream supply, while a demand miss could trigger a wave of destocking. Stress-testing a few scenarios will clarify exposure.