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People all over the world are adjusting to the new inflation prices on almost all products and services that we use everyday around the world as a result of supply shortages within the supply chain, and even a lot more growing demand for some of these products as well. Furthermore, according to a new poll in an article taken by fortune.com, around 15% of CEO’s from top clothing consumer brands that were surveyed planned to increase their prices by more than 10% this year. In addition to that, the United States own “federal reserve increased the funds rate by 75bps to 1.5%-1.75% during its June 2022 meeting, instead of 50bps initially expected”, the largest increase since 1994. In Australia, “the Reserve Bank of Australia lifted its cash rate by 50 basis points to 1.35%, marking 125 basis points of hikes since May and the fastest series of moves since 1994”. In the United Kingdom, the bank of England raised their interest rates last month up to 1.25%, which brought them up to the highest interest rate levels in almost 13 years. Lastly in Germany, the interest rate there rose to 0.95% in May compared, when it was only just 0.74% back in April.
So what is causing this inflation that we are seeing happen in the fashion industry, and how is the sustainable fashion industry being specifically impacted you may ask yourself? Well the inflation in general, is mainly caused by the government printing more money to finance its needs such as pandemic vaccines and extra cash payment to residents for the cause of unemployment. This was especially the case during the first few months of the Coronavirus Pandemic when policy makers, including former United States President Donald Trump, decided to pass certain legislation to print more money to support many Americans when most of their country was forced to temporarily close the doors to their businesses. While this was a brief sigh of relief to millions of Americans, the catch was that it was going to input more money into the economy that has trillion dollars of debt, devaluing the worth of Dollar. Therefore, it resulted in the great inflation crisis that we are seeing happening in front of our own eyes all over the world. In terms of sustainability according to Textile Exchange, less than 10% of the global textile industry market is actually composed of recycled materials. Therefore, there is so much demand for sustainable textiles right now, but not a lot of supplies which means that the prices have to inflate to meet current supply issues. The biggest material problem that we are still experiencing in this industry was with recycled cotton, as prices skyrocketed for clothing products that were being made out of this material due to the limited supply. However, the good news that will be coming out of this will be that the issues currently with the supply & demand are expected to be evening out towards the end of this year, and that the industry as a whole will be expecting to grow about 3% to 8% more than at this point from last year, which will even pass up pre-pandemic levels from 2019.
People naturally love to shop for new clothes every day in order to help keep up with some of the new and current fashion trends that we see changing on a consistent basis. But do you know how much we spend on new clothes every year? According to the Christian Science Monitor, people living in or citizens of the United States spend an average of $1,700 each year on accessories and clothing items as of 2012. Since then, as of 2019 the average monthly clothing expenses are about $134 (that’s $1,604 per year) as a result of the ongoing inflation problems that we are seeing happen. Therefore, more and more people are going to be buying fewer clothing items beginning this year than they have done in the past.
History tends to repeat itself. Even though we are facing a challenging time right now, increasing the interest rate we all know is to slow down inflation so that we don't have to pay for expensive goods (consequence of long time lock down and lack of consumption during Pandemic). This is only a step forward to a more normalised economy. However during such a tough time, we at Vivify Textiles did not impose any inflation prices. All fabrics have kept the same price before Pandemic as we understood it hasn’t been easy for small to medium size businesses. And we have also included new payment features such as Klarna for those who would like to pay for fabrics in several instalments. Therefore, we are still your reliable sustainable fabric supplier in tough times like this. You are our motivation to keep on what we are doing today. So we thank you all for your support and our way to pay forward is to continue being your strategic partner. For more information and for help on getting competitively priced sustainable fabrics, please contact us firstname.lastname@example.org or email@example.com.