Woollen mills in the UK are expanding as a result of growing demand across Europe and Asia, according to The Woolmark Company. 

Almost every mill in the country has seen its turnover "rise sustantially," the marketing and licensing group said.

Revenue at Yorkshire-based Abraham Moons, for example, has nearly doubled to GBP15m (US$23.5m) in 2013, from GBP8m in 2008, and the firm has increased its capacity by 45,000 sq ft in the same period. 

"Consumption of luxury goods is forecast for continued growth during these tougher economic times, just as it has over the last five years," said Stuart McCullough, CEO of Australian Wool Innovation (AWI), parent of The Woolmark Company.

"This is the case for the UK as well as more dynamic developing nations such as China and India." 

Some 70% of woollen textiles manufactured in the UK are now exported, compared to 50% in the 1980s, according to The Woolmark Company.

In the last few years Jigsaw, Hackett, Margaret Howell and Burberry have all moved their knitwear manufacturing back to the UK, where the wool apparel market is worth GBP1.24bn.

In addition, US clothing retailer J Crew designs suits made from woollen fabrics manufactured at Abraham Moons, while Chanel bought Barrie Knitwear's factory in Scotland last year.

The Woolmark Company plans to increase its 2013-14 marketing spend from A$23m (US$23.7m) to over A$35m to boost demand for merino wool in the UK, US, and China.