General Economic Situation and Industry Development

General economic situation

In fiscal year 2024, the global economy faced numerous challenges and uncertainties, as persistently high interest rates, subdued global trade, and weak investment flows weighed on economic activity. Geopolitical tensions, including the conflicts in Ukraine and the Middle East, along with outcomes of key elections, further exacerbated uncertainty. These factors collectively dampened consumer confidence and contributed to heightened financial market volatility. On a positive note, tight monetary policies pursued by the U.S. Federal Reserve (Fed) and the European Central Bank (ECB) succeeded in lowering inflation to more manageable levels. However, inflationary pressures varied significantly across regions, with some sectors and countries still grappling with elevated price levels. Despite these headwinds, the global economy showed resilience. In its latest forecast, published in January 2025, the International Monetary Fund (IMF) estimates global economic growth for 2024 at 3.2%, thus broadly in line with the prior-year level (2023: 3.3%).

According to IMF estimates, economic growth in the eurozone showed a modest recovery, rising to 0.8% in 2024 (2023: 0.4%). While France maintained steady growth at 1.1% (2023: 1.1%), other European economies saw limited improvements. Germany lagged behind, with a continued contraction of –0.2% (2023: –0.3%), driven by persistent weaknesses in its manufacturing sector and subdued overall demand. Although the ECB’s restrictive monetary policies helped ease inflationary pressures, elevated levels of uncertainty and structural challenges persisted. Economic growth in the United Kingdom improved to a level of 0.9% in 2024 (2023: 0.3%), driven by declining inflation and a gradual recovery in consumer spending.

The U.S. economy remained robust, achieving growth of 2.8% in 2024, broadly in line with the prior-year level (2023: 2.9%). Underpinned by solid consumer demand, a strong labor market, and a more measured approach from the Fed compared to 2023, the U.S. once again outperformed other major economies. While concerns lingered over potential policy shifts post-election, the country’s underlying economic momentum remained a key driver of global growth. In Latin America, growth remained stable at 2.4% in 2024 (2023: 2.4%). The region demonstrated resilience despite global uncertainties, supported by gradual improvements in policy frameworks and a moderate uplift in consumer demand.

China faced notable economic headwinds in 2024, with growth slowing to 4.8% (2023: 5.2%). Cyclical challenges, including the ongoing property market crisis and particularly weak consumer confidence, weighed heavily on the economy, offsetting gains from stronger net exports. The broader Asia region (excluding Japan) experienced growth of 5.2% (2023: 5.7%), reflecting a deceleration in major economies like India and Southeast Asia amid slowing industrial activity. In Japan, economic growth contracted by –0.2% in 2024 (2023: 1.5%), primarily reflecting temporary supply disruptions and weaker export demand.

Industry development

For the global apparel industry, fiscal year 2024 was shaped by persistent macroeconomic and geopolitical uncertainties, including high inflation, tight monetary policies, and weak consumer sentiment. Additionally, ongoing shifts in global trade and supply chain disruptions added further volatility to the industry’s performance. In the first half of the year, the market environment remained subdued across regions, with cautious optimism for improvement. However, regional developments deteriorated in the latter half of the year. According to a joint study by The Business of Fashion and McKinsey & Company, published in November 2024, growth for the global apparel industry (excluding the luxury segment) is expected in a range of 2% to 3%, reflecting the overall challenging market environment in 2024.

In Europe, the apparel industry (excluding the luxury segment) experienced muted consumer demand throughout 2024, resulting in revenue growth slowing to a range of 1% to 3% (2023: 4%). While inflationary pressures eased slightly, ongoing economic uncertainty and geopolitical concerns kept personal saving rates high, weighing on retail spending. In the important U.S. market, on the other hand, the industry (excluding the luxury segment) returned to growth, with revenues expanding 2% to 3% (2023: –1%). Industry sales benefited from a modest rebound in consumer demand and early signs of stabilization in the broader economic environment toward the end of the year, further supported by the outcome of the presidential election. China, in contrast, faced pronounced economic headwinds throughout the year. Cyclical challenges, including weak consumer sentiment, and limited impact from government stimulus measures resulted in projected industry growth (excluding the luxury segment) of 3% to 4% (2023: 9%). Industry growth in China thus remained modest compared to historical levels, reflecting persistent challenges as well as increased savings rates in the market. The Chinese luxury market, in particular, experienced significant setbacks, with revenues potentially contracting by as much as 10% at times during the year.