The global textile business-situation indicator stood at -23 percentage points in the 40th ITMF survey, conducted between 21 and 29 September 2026 — a marked recovery from the -46 points recorded in November 2023, but still firmly in contraction territory.

The International Textile Manufacturers Federation said uncertainty has become a persistent feature of trading conditions, even as headline sentiment improves. For sourcing teams and mill operators, the reading signals that order books remain thin and that any capacity planning beyond confirmed orders carries risk.

Where is demand actually holding up?

Only two regions reported positive current business conditions:

• South Asia: +13 percentage points
• Africa: +9 percentage points

North and Central America posted the weakest regional reading at -56 percentage points, followed by South America at -44 and Europe at -36. The regional split matters for buyers weighting supplier allocation: South Asian and African capacity is operating from a comparatively stronger demand base, while Western Hemisphere mills face the sharpest pressure.

The value chain shows an equally uneven picture. Fibre producers were the only segment reporting positive conditions, at +67 percentage points. Spinners recorded -33, finishers -42, and textile machinery manufacturers -35 — a reading the survey links to companies' continuing reluctance to commit capital expenditure. Equipment makers' weakness is a leading indicator: mills are not investing in capacity they cannot fill.

Is the six-month outlook credible?

Expectations for the next six months reached +19 percentage points globally — the survey's most positive forward signal. Africa led at +59 percentage points, while East Asia (-20) and South-East Asia (-6) were the only regions retaining a negative outlook. Fibre producers again topped the segment rankings at +67.

The caveat: 46% of respondents expected no change in their situation. ITMF's own framing suggests the improvement in sentiment has not been matched by broadly stronger trading signals. Buyers should treat the forward reading as an intention, not a confirmed order pipeline.

Order intake improved marginally to -24 percentage points but stayed negative. South America hit a record low of -69 percentage points, pointing to particularly difficult demand conditions in the region.

What are companies doing about costs and tariffs?

Weak demand topped the concern list at 56% of respondents, followed by high raw-material prices at 42% and energy costs at 41%. The survey linked renewed inflationary pressure to the war in Iran, while concern over geopolitics fell to 36% from 46% in the July survey.

Responses to US tariffs diverge sharply:

• 29% of respondents are diversifying into markets outside the US
• 23% are investing in automation and efficiency measures
• 23% are absorbing higher costs

The diversification figure is the actionable one for sourcing teams: nearly a third of surveyed companies are actively re-routing away from US-bound flows, which will reshape quoted capacities and lead times across alternative destinations over the coming quarters.

What do operational metrics show?

Order backlogs shortened slightly to 2.3 months, staying within the 2.0-to-2.5-month range recorded since mid-2023. ITMF said this reflects a tendency among companies to work primarily against confirmed orders rather than build longer production pipelines — effectively a sector-wide shift to make-to-order discipline.

Capacity utilisation rose to 71%, above the 68% low of November 2023 but well below the pre-late-2022 levels of more than 80%. The gap indicates substantial spare capacity available for spot allocation, but limited throughput to absorb fixed-cost inflation.

Order cancellations held stable at roughly 2% on average, although finishers have recorded increases for three consecutive surveys — a pattern downstream buyers should monitor when negotiating finishing contracts. Inventory levels were generally lean, with South-East Asia reporting a record low.

The Americas were the exception: relatively high inventories combined with weak incoming orders point to a build-up of unsold stock, according to the survey — a dynamic that could trigger discounting or production cuts in the region if order intake does not recover.

The federation cautioned that rising costs and inflation could limit the scope for a material recovery in the near term, meaning the sector enters 2027 with leaner inventories but no confirmed rebound in demand.