The third quarter saw a reversal of the second quarters' developments in the global yarn and fabric markets, as production dipped over the summer months. The downturn in yarn inventories continued, but fabric stock rose in the US and particularly Europe. Asian fabric inventories were again the exception, with little change recorded over the third quarter.

Global yarn production during the quarter fell by 5.1 per cent, due to lower US and European output. US yarn output declined by 7.5 per cent, while European production was 8.7 per cent lower. On an annual basis, world yarn production rose by 1.9 per cent, supported by the 10.3 per cent increase in European output over the period. US production declined 1.6 per cent while Asian output was 0.7 per cent higher year-to-year.

Fabric production erased its second quarter gain with a decline of 3.0 per cent during the third quarter. As a result the annual increase in global output almost halved to 5.4 per cent. The third quarter drop in fabric production was driven by a 9.3 per cent decline in European production, which has been a seasonal feature in output data. On an annual basis, European fabric output rose 7.1 per cent. The annual increase in Asian production has dropped back to 6.9 per cent. US fabric production gained 1.9 per cent over the year.

World yarn stock declined moderately over the second quarter (-2.0 per cent), and the annual rate of change is now negative (-2.3 per cent). European inventories were relatively stable (-0.8 per cent), while Asian stocks fell by 2.6 per cent. On an annual basis, growth in Asian yarn stocks was 1.1 per cent, but the year saw a 7.5 per cent reduction in European yarn inventories.

World fabric stocks rose 2.2 per cent over the third quarter, revisions fully reversing the decline reported for the previous quarter. European and US inventories increased by 6.4 per cent and 1.3 per cent respectively. Compared with the third quarter of 1999, fabric stocks have risen 3.6 per cent. This moderate inventory build-up has been distributed fairly evenly across regions, with annual stock gains of 4.2 per cent in the US, 3.9 per cent in Asia, and 2.9 per cent in Europe.

European yarn orders were barely changed over the third quarter, orders nonetheless sustaining annual growth of 19.2 per cent. Fabric orders were slightly lower in Europe (-1.8 per cent) and the US (-3.2 per cent). On the annual basis, European fabric orders have strengthened by 8.5 per cent while the US reported a more modest gain of 1.5 per cent.