Italian Fashion Industry Outlook 2023: Anticipating 4.5% Growth

Italian fashion started 2023 on a high note with an impressive first-quarter growth of 11.4%. However, the industry has since experienced a noticeable slowdown, with an estimated year-end growth rate of 4.5%, culminating in total sales of 103.28 billion euros. Carlo Capasa, President of the Italian National Chamber of Fashion (CNMI), acknowledged this shift and described the 4.5% growth as quite positive in light of rising prices and the current global situation.

As he unveiled the Milan Fashion Week schedule, Capasa recognized the challenging times, particularly with ongoing conflicts in Europe. Alongside this, the Camera della moda released updated estimates for sales and exports of «Made in Italy» products, encompassing textiles, leather goods, clothing, footwear, jewelry, beauty, and eyewear. Notably, the sector experienced a decline in sales in April compared to the previous year, marking the first drop since February 2021.

Production costs in the sector, which surged in the first quarter, exhibited a more moderate increase of 1% in the second quarter. Key segments like textiles, clothing, leather goods, and footwear saw a 5% decrease in domestic production during the first half of the year. Fashion products experienced comparatively lower inflation, with consumer prices rising by 3% in the first half, compared to Italy’s overall inflation rate of 8.1%.

The slowdown can also be attributed to the fluctuating consumer confidence index, which improved in the first three months of the year but stabilized in the second quarter and worsened in July and August. Simultaneously, business confidence exhibited a steady decline from April onwards, according to the Chamber of Fashion’s Fashion Economic Trends report.

International sales continue to perform well, although there has been a noticeable deceleration. In textiles, clothing, leather goods, and footwear, Italian exports increased by 6.5% between January and May, with notable growth of 18.8% to France and 18.4% to China and Japan. Exports to the BRICS countries (Brazil, Russia, India, China, and South Africa) also demonstrated strong growth, including a recovery in exports to Russia. The Italian eyewear, jewelry, and beauty sectors achieved remarkable success abroad, with exports increasing by 15% in the first five months of the year.

In contrast, imports recorded a 2.1% rise in the textiles, clothing, leather goods, and footwear sector and a notable 16.4% increase in other categories, such as eyewear, jewelry, and beauty. However, imports from China to Italy saw a significant decline of 19.5% during the same period.

Despite these fluctuations, the trade balance remained positive and even improved, reaching €17 billion in the first half of 2023—a €2.1 billion increase compared to the same period in 2022.