UK fashion manufacturers began 2025 against a backdrop of “shaky” demand, a new report shows, with it saying that sales and purchasing dipped and lead times started to creep up.
Archivo
That said, some of the bad news comes from the fact that the third quarter of 2024 was a particularly strong period so any quarter-on-quarter comparison will look weak. But the current performance, while nearer ‘normal’ is still weaker than usual.
And recent American announcements about import tariffs are only likely to pile on more pressure and create more uncertainty, potentially denting manufacturing activity. Whether that dent is catastrophic or not remains to be seen, however.
Unleashed, an inventory management and software specialist, said that its figures show small and mid-sized firms saw their average sales revenue drop by a third in the final quarter of last year, from nearly £524,000 in Q3 to £352,000. And the number of purchase orders (POs) placed also fell by half from 790 to 399, while lead times were slightly up – from 23 days to 25 compared to Q3.
The research also shows that sales revenues were down by almost 3% compared to the same period last year, and POs by over 8%.
The company works across multiple industries but looking specifically at clothing and fashion it said that while profitability/return on investment improved in Q4 both year on year (YoY) and quarter on quarter (QoQ), sales revenue was down against both comparison periods. That almost 3% YoY decline referred to above looked tame compared to the nearly 33% QoQ plunge. Meanwhile POs declining by the aforementioned more-than-8% YoY also seemed relatively stable compared to almost a massive 50% QoQ drop.
That said, while lead times expanded, as mentioned, from 23 days to 25 days QoQ, they were down from 38 days in Q4 2024.
As we said, Unleashed works across industries and has data for 12 different industrial sectors. It said that clothing and fashion wasn’t the hardest hit with suppliers in the energy and chemicals market seeing an even bigger decline.
“Low consumer confidence and newly-volatile international trading conditions seem to be taking their toll on manufacturers across almost every category we looked at – which made it a tough start to the year for many businesses,” it explained.
But it added: “While many will be rightly concerned about this drop-off, it’s worth bearing in mind that Q3 2024 was a bumper quarter, when we saw both sales revenue and POs surge. That suggests performance is returning to more normal levels, albeit a little more subdued than we’d all like to see.”
