Novel Corona Virus Crisis

The novel corona virus crisis is starting to bite all through the apparel and textile supply chain. Many factories in China have reopened, but restrictions on movement including ongoing quarantines make it difficult to produce at sufficient capacity. This leads to delays from orders from Chinese apparel factories, but also to material shortages in the apparel industries in many countries reliant on Chinese textiles. On the retail side, major US and European brands are reporting large sales drops in China. The virus has also spread extensively outside of China and in South Korea and Italy we are even seeing mass quarantine situations. Several countries restrict entry of people who have visited China in the past two weeks.

At this point in time, uncertainty is a major factor. We are going to go through a tense period in the coming weeks after which we hope that the balance between measures needed to stop the epidemic and measures needed to restart the economy will shift in favour of the economy. This may happen if the outbreak is reaching a plateau in the coming weeks, which of course we all hope will happen. We should however be prepared for the possibility of a longer period of growing problems with a growing negative effect on our industry and on the global economy as a whole. Many companies are already make contingency plans. IAF will work with its members and relations to exchange information, to answer questions and to link to multilateral organisations such as the WHO if necessary.

In the meantime, the IAF hopes that the industry overall can keep a cool head and not succumb to overreactions or short term opportunism. The WHO advises to people to continue with their international travels, keeping a few precautions in mind. Please check for practical advice. In an interconnected supply chain the force majeure created by this crisis hopefully gives rise to collaboration and to a fair distribution of pain among the different parts of the supply chain. The media report fortunately many cases of such collaboration. But above all, let us hope that the epidemic and the consequent economic problems can be brought under control soon.