Fashion Industry: Half-Year Update 2024

August 2024

The market environment continues to be challenging for the fashion industry. Demand remains sluggish in Europe, due to inflationary pressures and tight monetary policies, while in the US, uncertainty looms after 2025. In China, consumer confidence suffers from the lingering impact of the real estate crisis. Growth prospects remain strong in emerging economies, in particular in India. This report looks at the forecast sales for key fashion categories in 16 key markets around the world.

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Key findings

Stagnation and downside risks persist in 2024

Global real GDP growth is expected to reach 2.9% in 2024, slightly down from 3.1% in 2023 and remaining below the pre-pandemic levels. This slowdown is primarily due to the lagging effect of high interest rates and ongoing high costs for businesses and consumers, while downside risks remain dominant amid rising geopolitical tensions. Further easing of inflation and loosening monetary policy are not expected until later in 2024, hence a cautious short-term forecast for sales of fashion items and discretionary spending, in general.

Major economies continue to face ongoing challenges

The US economy continues to defy expectations and showed resilience in the first half of 2024, leading to a further upgrade in its real GDP growth forecast to 2.1% in 2024. Nevertheless, ongoing challenges, including elevated interest rates, persistent inflation and high consumer debts will weigh on consumer spending and growth in the US in the longer term. In China, a lingering real estate crisis and subdued private consumption will continue to restrain economic expansion in the world’s second largest economy. In the Eurozone, real GDP growth is expected to remain low at 0.7% in 2024, before it increases to 1.5% in 2025 amid easing inflation and expected rate cuts.

Emerging markets continue to provide new areas for growth

Despite headwinds, economies in emerging markets in Asia Pacific, including India and Indonesia, and Latin America continue to provide new areas for growth for fashion players. Emerging and developing economies will indeed outperform advanced economies, with 2024 real GDP growth being estimated at 4.0% compared to 1.4% in advanced economies, driven by continuing strength in domestic consumption and in attracting investments which is set to benefit demand for discretionary items like personal accessories and apparel and footwear.

Scope
Key findings: A slow and cautious short-term forecast for sales of fashion items
The challenge of driving growth as consumers reprioritise their discretionary spending
High central bank interest rates impact household budgets and private consumption
Supply-side price pressures to persist throughout 2024 for apparel and footwear…
…while a similar scenario is observed for key personal accessories categories
Apparel and footwear poised for slow growth as consumers’ inflationary pressures persist
Apparel and footwear: Revisions vs annual research for all 16 markets in scope
Personal accessories: Global sales see a mild downgrade due to slower luxury demand
Personal accessories: Revisions vs annual research for all 16 markets in scope
US: Outlook improves in 2024 as the country’s economy continues to outpace expectations
Apparel and footwear in the US: Short-term boost but post-2025 growth remains subdued
Personal accessories in the US: Slowdown in luxury categories shapes forecasts
Mexico: Economy and apparel and footwear forecasts stay on course for growth
Mexico: Jewellery, watches, and bags and luggage all stay on track
Brazil: Economic slowdown in 2024…
…but apparel and footwear in Brazil stays on course for growth and attracts investments
Jewellery: Fastest-growing category in personal accessories in Brazil
China: Real estate crisis and weak consumer demand remain a drag on the outlook
China: Downgrade for fashion and luxury sales due to subdued consumer sentiment
LVMH’s half-year results 2024 are emblematic of challenges and shifting demands in China
Japan: Consumer spending stays soft but luxury enjoys boom, thanks to inbound tourists
Japan: Apparel and footwear maintains slow growth, personal accessories sees upgrades
India: Robust private consumption and strong economic outlook
India: Apparel and footwear sales growth revised from double-digit to a high single digit
Personal accessories: India cements its position as rising star in luxury and fashion
Indonesia: Robust momentum in domestic consumption and fashion sales
Eurozone: Economic stagnation continues in 2024
Germany and Spain: (Slow) growth maintained in apparel and footwear
France and Italy: A slightly less negative forecast for apparel and footwear through to 2028
UK: Growth to remain muted as high borrowing costs and prices dent consumer spending
Apparel and footwear in the EU and UK: Zara Pre-Owned rolls out in 14 more European markets
Personal accessories in the UK and EU: Spain shines as a bright spot for luxury
Australia: Forecasts comparison
Canada: Forecasts comparison
South Korea: Forecasts comparison
Turkey: Forecasts comparison
About the Apparel and Footwear and Personal Accessories Half-Year Update Dashboards

Apparel and Footwear

Apparel is the aggregation of clothing and footwear. This dataset covers retail sales of apparel through both store-based retailers and non-store retailers. Excludes black market sales (i.e. untaxed, generated within informal retailing)and duty free sales (travel retail). Items must be new when sold to the consumer; second-hand/used items are excluded. Antique and/or vintage clothing and footwear is also excluded.

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