The 37th GTIS shows a deteriorating global business climate, with the global business situation balance falling to -25 percentage points as the US/Israel-Iran war disrupted energy markets. Africa was the only region posting a positive business situation and North & Central America recorded the steepest decline, while garment producers fared best among segments with textile machinery manufacturers remaining deeply negative. 

The global business expectations balance collapsed from over +23pp to +5pp - the lowest since November 2022 - as stagflation risks comparable to the post-Ukraine invasion shock of 2022 are reviving. South America led regional optimism while South-East Asia was the most pessimistic. Brands & retailers were the most upbeat segment against a deeply negative outlook for weavers/knitters.

Geopolitics overtakes weak demand as the industry's top concern

For the first time, geopolitics topped industry concerns at 50%, edging out weak demand at 49%, driven by the war in Iran and surging energy prices, higher raw material costs, and logistics disruptions from the Strait of Hormuz blockade. Notably, tariffs dropped sharply as a concern from 31% to 13%. In response, firms intensify efforts towards market diversification away from the US and internal cost absorption, while relocation of productions and other capital-intensive strategies remain low. 

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