From Cautious To Uncertain For U.S. Textiles

By Jim Borneman, Editor In Chief

The spread of COVID-19 continues and fear and uncertainty abound for most businesses, associations and families. Textile World, not insulated from the coronavirus impact, was sent scrambling as editors were finalizing March/April issue files for print. The issue was planned as the Techtextil North America and Texprocess Americas preview issue, but four days prior to press time, show organizer Messe Frankfurt, in conjunction with event partners ATME-I and SPESA, decided to postpone the event in light of the worldwide spread of COVID-19.

“Up until this point, we were optimistic that May was far enough away to proceed with the events as planned,” said Kristi Meade, show director – Technical Shows: Textiles, Sewn Products, Equipment and Technology. “However, as the situation has evolved, we
feel that we must act in the best interest of our exhibitors, visitors, and the industry overall.”

The combined event at the Georgia World Congress Center in Atlanta was one
of the largest North American textile events scheduled in 2020, but the good news is that the show will go on. It has been rescheduled for December 15-17, 2020 — same venue, different date.

In a sense, the swift rescheduling by Messe Frankfurt adds some certainty to a very uncertain situation, as well as gives the industry something to be optimistic about later in the year.

One would hope that as businesses move into the third and fourth quarters of 2020,
as the shock to the economy begins to normalize and the country gets past the
election, mid-December might be a great time to reboot the U.S. textile industry.

As of TW’s press time, few of the effects of the virus have shown up in the United States’ underlying economic data. Half of the economists in the Wall Street Journal Survey are not predicting a recession — two or more concurrent quarters of negative gross domestic product growth. Extremely low oil and gasoline prices, mortgage interest rates and bond yields may act as a buffer against lower profits caused by the economic effects of the virus.

Oil companies may struggle as OPEC and Russia feud over prices and production levels. The side effect is positive for oil consumers and producers of petroleum-based products, but tough on domestic oil frackers that have made the U.S. energy independent. But gasoline prices have a big effect on U.S. consumers — the very people that will set the tone of the depth and speed of a recovery.

One of the few saving graces is the shape the economy was in prior to the pandemic. As stated in this very column in the January/ February 2020 issue of TW, “Positive jobs data, low unemployment, low inflation, reduced regulation, the new USMCA in place, energy independence, low oil prices, completion of the phase one U.S.-China trade agreement …” may blunt the economic effects of the virus.

With employment so tight, it will be interesting to see how employers react. Will they proceed with layoffs, risking the ability to hire workers should they need to ramp-up production in snap-back recovery? Will layoffs be prudent given the unknown depth and duration of the virus’s effects?

It is really a lot of crystal ball work at this point in time. Some say it’s time to invest — stocks are on sale. Others say that this is a historic event with long-lasting negative impacts on the global economy — where airlines, cruise lines, hotels and professional sports will never be the same.

The reality probably falls somewhere in between these views. America is resilient
and will move forward.

March/April 2020