Quarterly export volumes for Pakistan’s core high textile categories — knitwear, towels, bedwear, and garments — show a sharp deviation in Q2 2025. The latest figures mark a reversal from the trend observed across the past five quarters, with all four categories posting quarter on quarter declines.
This is not a seasonal dip. If anything, Q2 tends to outperform Q1. Historical data from 2008 to 2024 shows that knitwear volumes rise by an average of 13 percent between Q1 and Q2 of the calendar year. Towels, bedwear, and garments also post mild improvements during the second quarter. Q2 2025, however, broke that pattern. Knitwear volumes dropped 4.6 percent versus Q1. Towels fell 12 percent. Bedwear declined 10 percent. Garments dropped 2.6 percent.
Year on year growth tells the same story. Q1 2025 volumes were up across the board. Q2 2025 was negative for all categories. Towels, bedwear, and garments posted their first annual volume contractions in nearly two years.
Is this a plateau? Not yet. Trend decomposition and short-term forecasts suggest that core categories are still growing. Knitwear continues to post strong gains and is expected to breach 70,000 metric tons per quarter by early 2026. Bedwear remains on an upward slope. Towels and garments are more volatile, but neither shows a structural decline.
Trendover the past eight quarters remain positive for knitwear, towels, and bedwear. Garments are flat. But in the most recent four quarters, slopes for towels and bedwear have turned negative. This suggests a loss of growth momentum. Less a structural ceiling, more a soft patch.
The source of the slowdown is not seasonal. It is structural. Energy prices remain elevated. Refunds continue to be delayed. The currency is relatively stable, but weak demand in the EU and tariff pressures in the US retail market may be dampening new orders. Exporters report high input costs and delays in order confirmations.
Monthly export data supports this assessment. April 2025 turned out to be the first time in 12 months when cumulative earnings from high value textile segments fell under the billion dollar mark. This was also the first major contraction of the last fiscal year. It followed a tapering of growth since September 2024, when monthly gains began to decline steadily despite rupee stability and improved order visibility.
If current constraints persist, the dip could become the new normal. But structurally, the sector has not yet hit a ceiling. Volumes are still near record highs, and forecasts suggest stability if not acceleration. This is conditional on policy support, cost rationalization, and working capital flows keeping pace with order cycles; however, the reversal of duty concessions under EFS and hardening of interest rates do not exactly indicate that good times are right around the corner.
This is not necessarily a plateau. But the next few quarters will determine whether the industry stabilizes at a new high or stalls before reaching it.