The Global Economic Crisis Looks Set to Engulf the Textile and Clothing Industry in Asia

After several years of growth, the boom in textile and clothing exports from a number of leading Asian supplying countries looks set to end in 2009 as the global economic crisis takes its toll.

The crisis could engulf major players such as China and India, whose exports have already slowed down markedly. It could even affect Vietnam—whose exports have continued to surge.

Vietnam has been one of the most successful exporters of textiles and clothing in recent years. In 2007 export sales grew by 33.4% to a record US$7,784 mn—thus exceeding the industry’s US$7 bn target for the year. Moreover, exports continued to soar in 2008, despite a slowdown in the global economy. As a result, Vietnam rose to become the USA’s second biggest foreign supplier of textiles and clothing in the first ten months of 2008—behind China.

But signs of a slowdown are already evident. In the first ten months of 2008, Vietnamese exports to the USA grew by 21.5%. Although such an increase is substantial, growth in 2007 had reached 34.2%.

The trend in the EU market has been similar. Growth in EU imports from Vietnam weakened in euro terms from 12.2% in 2007 to 8.4% in January-June 2008.