NEW YORK -- The U.S. textile industry is a very sick patient, said consultant Nicholas Hahn at a Wednesday financial forecast for the Knitted Textile Association, but the situation is not terminal.
The seminar, held at Arno Ristorante in New York, brought together three speakers to address the issue of recovery from the current economic recession. Opinions on when the economy might bounce back were positive, but the outlook for the future of the textile industry remained grim.
The forecasts from the three-person panel -- Mark Golivan, senior regional economist at J.P. Morgan; Carl Steidtmann, an economist at Deloitte Consulting, and Hahn, who serves as chief executive officer of the Hahn International consulting company -- ran the gamut.
Golivan said that despite elevated levels of unemployment and low consumer confidence following Sept. 11, the consumer continues to support the economy through spending. Holiday retail sales were OK, he said, as the consumer started to spend more as 2002 approached. Golivan said he expects the recession to come to an end by spring or summer, with businesses recovering sooner than later.
He said, "2002 is not as bright as it was 18 months ago, but the prognosis is good."
Steidtmann said deflated prices will be the main issue of concern for the economy and that manufacturers will be affected most directly.
"It's a manufacturing-based recession, the consumer is fine and that will continue, but we will see deflation," he said, contending that deflation is not necessarily bad. Often, deflation requires an increase in productivity and forces the best companies to the surface, Steidtmann said.
Most executives are not experienced with a deflationary world, and apparel textile prices have come down since 1998 and jewelry and furniture are all seeing price deflation, he said.
He added that the U.S. will have to adapt to a free-trade environment, since developing countries use apparel manufacturing as an entry into the world economy.
"That's probably not good for the U.S. textile industry, but it is good for the world's consumption of textiles," he said, adding that he expects 2002 to be "overall not a bad year, but not a great one either."
Hermès is launching a Laundromat pop-up shop in NYC - dubbed Hermèsmatic - where customers can bring their old scarves to be dip-dyed by an expert. Get all the details on WWD.com. #wwdnews (📷: @donstahl)