The Year Ahead: The World’s Fragile State and What It Means for Fashion
The global economy is in a fragile state. Geopolitical tensions, inflation and the climate crisis are heightening uncertainty and volatility — and weighing on consumer confidence. For fashion leaders, navigating this will require sharpened strategies.
A range of destabilising factors, such as inflation and heightened geopolitical tensions, continue to weaken an already fragile world economy, with global GDP growth expected to fall to approximately 2.5 percent in 2023 as the threat of recession looms over many countries.
Consumers are becoming more cautious about their discretionary spending in most regions. Europeans intend to make the biggest spending cuts on apparel, footwear, and accessories and jewellery.
To protect their companies’ bottom lines, 72 percent of fashion executives plan to increase prices and 37 percent expect to focus on cost improvements in 2023, a higher proportion than in 2020.
The seventh annual State of Fashion report by The Business of Fashion and McKinsey & Company reveals the industry is heading for a global slowdown in 2023 as macroeconomic tensions and slumping consumer confidence chip away at 2022′s gains. Download the full report to understand the 10 themes that will define the industry and the opportunities for growth in the year ahead.
According to The State of Fashion 2024, a potentially volatile global economy and geopolitical tensions in the coming months could further dent consumer confidence in key markets, requiring fashion brands, retailers and suppliers to bolster contingency planning and double down on operating efficiencies, among other measures.