Brazilian Textile Industry Forecasts Continued Growth in 2018

Brazil’s textile industry has reported an overall growth in sales of 3.2% for 2017, and even bigger increases are forecast for the year ahead. The latest data from the Brazilian Textile and Apparel Association, ABIT (Associação Brasileira da Indústria Têxtil e de Confecção) predicts an overall growth in revenues of 3.29% for the year 2018. Brazil textile sector revenues for 2017 grew by Brazilian Real BRL7 billion (US$2.1bn) to a total of BRL144bn (US$45bn) for the year. Activity was boosted in 2017 by the country’s overall economic growth, according to figures within Brazil’s textile industry.

“The government concentrated on more horizontal measures, which reached the entire economy and all sectors,” says Renato Jardim, international and economy area manager at ABIT.

While there were no specific government measures that directly targeted the textile industry last year, slow, broad economic growth in the country (up 0.26% in 2017 and a projected 1.79% in 218, says the World Bank) may have helped to attract investments in the sector, according to ABIT, which in 2017 grew by 13.7% to BRL1.9bn (US$595m).

Clothing production grew by 3.5% in 2017, with Brazilian producers making 5.9 billion garments over the year. Textile production reported a 4.2% increase in volume, year-on-year, creating 1.77 million tonnes of textiles. But the industry’s most prominent growth was in garment sales, which grew by 6.5% from 2016’s 6.3 billion, to a total of 6.71 billion items, with older stocks being sold along with newer items.

Jardim believes that Brazil’s economic recovery, following its two-year steep recession, has released consumer demand that had been “repressed in recent years” by the hard times. “There is a suggestion that lower value products performed better in comparison to others,” he says. “You can buy a T-shirt with little financial availability. It’s a faster, easier purchase decision than others, which is maybe why [the textile sector] has recovered faster than others.”

ABIT expects to see growth continue steadily in 2018, forecasting an overall industry sales growth of 3.29% for the year. Investments in the sector this year are expected to grow by a further 18% on last year’s total, reaching BRL2.25bn (US$685m).

Among its predictions, ABIT expects to add 2.5% and 4% to the industry’s clothing and textile production, respectively, reaching 6.05 billion garments and 1.84 million tonnes of textiles over the next 11 months. Garment sales are also expected to grow by 5% with sales of some 7.05 billion items predicted, and with some older stock being sold.

While Jardim expects Brazil’s main market to remain domestic sales over the coming year, he tells WTiN that 2018 could be the year when Brazil becomes a bigger player in textile export markets, beginning with its neighbours and long-standing trading partners. “We have just finalised a free trade agreement with Colombia,” says Jardim, emphasising that this will benefit the 25 Brazilian companies that were present at Colombia’s international textile fair Colombiatex last month (January 25-28).

“There’s also a recovery happening for our international trading partner, Argentina, where we can also see an economy in transition, with reforms and gradual growth. This may benefit our exports,” he adds.