LONDON — Shirt makers will slash $2,7 billion from their 2020 output, a new study has found, as global brands seek to diversification.
The results, published Wednesday in the journal Science, show that the textile and paper industries are the biggest winners of the year, accounting for 44% of global output in 2020, up from 33% in 2020.
The study also found that the men’s clothing and footwear industry, which accounts for about 30% of the global production, would be hit hard, with the industry losing an estimated $2 billion, or 5% of its 2020 output.
The textile and shoe companies that are most at risk of losing the most are shoe makers, which are losing an average of $1.9 billion a year, the study found.
The companies are also struggling to maintain a foothold in emerging markets, where they have struggled to compete with traditional brands.
For apparel, the research shows that China’s textile and garment industry would be the biggest loser, losing an additional $1 billion, as it would lose more than 40% of overall production.
In addition to the textile industry, other sectors that would be affected by the slowdown are footwear and furniture.
Clothing companies have been hit hard in recent years due to the rise of low-cost retailers such as Gap Inc., which has recently slashed its prices and introduced more affordable products.
Gap, which employs about 2,000 workers in its Toronto headquarters, is now slashing prices by 10% for all models.
Gap’s CEO said in February that the company’s $9.99 price for a pair of jeans would be $50, and would soon be $20, making the brand’s prices a bargain.
The study also shows that the largest losers in the textile industries would be furniture, with more than $6 billion in potential losses.
The furniture industry accounts for almost 20% of textile and textile-related global output.
In 2020, it was expected to generate $2 trillion in global exports.
With the loss of so many of its workers, the textile firms have had to turn to cheaper foreign labor, which can cost as much as $2 a day.
In the past few years, more than half of textile workers have been recruited from abroad.
A company can also choose to make its products in another country, as is often the case in China.
In other countries, companies can also use the outsourcing model, in which companies subcontract their production overseas.
This is particularly true of the apparel and footwear industries, where the use of this outsourcing has helped the companies avoid being exposed to labor and climate-related costs, the report found.
Despite the overall economic downturn, the world’s biggest clothing manufacturers, including Gap, are seeing a recovery in the clothing industry, with a year-on-year gain in revenue, the Journal reported.
Gap reported that it had seen sales of $974 million, up 6% from the previous year.
The company also reported that its global turnover jumped 2.5% to $20.7 trillion in 2020 from $19.3 trillion in 2019.
While many apparel brands are investing in factories, many are also investing in manufacturing in the countries where they operate.
That is why the textile manufacturing industry has been the most resilient, accounting, for the largest percentage of global production in 2020 at almost 50%.
“The textile industry is the engine of growth in the world, yet we have been so focused on the supply chain and sourcing it from other countries,” said Stephen H. Fagan, the head of global apparel at consulting firm IHS Markit.
“We are seeing many companies taking advantage of this.”
For textile and apparel firms, the impact of the downturn has been particularly hard to predict.
As factories shut down and new factories were built, the global supply chain was disrupted.
“This is a challenging time for the textile sector, particularly for companies that were already struggling to meet the demand for their products,” said Daniel H. O’Neill, the chief economist at consulting group Pantheon Macroeconomics.
According to the International Federation of Shirt and Footwear Manufacturers, the number of factories worldwide was down more than 1.6 million last year, but it expects a rise to 3.5 million factories by 2020.