Quick Take

When Energy Crisis Meets Extreme Heat in Garment Supply Chains

Lucy Siers

May 12, 2026

The garment industry in South and Southeast Asia is facing overlapping crises. The conflict in the Middle East is disrupting global oil markets, driving up fuel prices across Asia, and reducing demand for manufactured goods, while incoming summer heatwaves are likely to compound pressures on manufacturers and workers. Without reliable orders and electricity supply, workers face significant threats to their safety and livelihoods.

The NYU Stern Center for Business and Human Rights’ upcoming report on extreme heat in the garment sector, due out in June, examines these converging pressures and what brands, suppliers, and governments must do to respond.

Asia relies heavily on imported energy, with around 80% of the oil that normally passes through the Strait of Hormuz destined for Asian markets. According to the International Energy Association, the conflict is “creating the largest supply disruption in the history of the global oil market.”

The effects are already visible across garment supply chains.

South and Southeast Asia dominate global garment manufacturing. In 2019, Asia accounted for 55% of global garment and textile exports. By 2023, the region accounted for 75% of the global garment workforce, including around 42 million women workers.

Because of the conflict, manufacturers across the region are now dealing with load shedding (planned power outages that prevent grid collapse but disrupt supply chains), rising transport costs, and surging raw material prices. In Bangladesh, factories are reportedly operating at only 50%–60% capacity because of fuel shortages and weak demand. Across India and Bangladesh, rising polyester yarn prices—linked to the petroleum market—have disrupted polyester manufacturing and increased costs for garment producers.

In Noida, a major garment manufacturing hub in northern India, worker protests broke out over wage revisions amid rising living costs and fuel prices. At the same time, suppliers are reporting growing uncertainty around future demand. One senior official at a leading European buyer said garment orders could fall by 8%–10% next season as brands become increasingly cautious about placing orders.

Reduced factory operations and shrinking orders have a compounding effect on workers: reduced shifts, layoffs, and wage erosion come at a time when household costs are rising sharply. Once again, workers already earning below a living wage are absorbing the greatest shocks of a global crisis.

Extreme summer heat will only exacerbate these challenges and the attendant strain on both manufacturers and workers.

Asia is one of the regions most vulnerable to climate-driven extreme heat, with approximately 75% of the workforce in the Asia-Pacific region exposed to extreme heat each year. Extreme heat increases the risk of heat stress, the leading cause of weather-related deaths, heatstroke, kidney damage, workplace accidents, and other serious health impacts for workers.

Temperatures have already been climbing in parts of the region, with recordings of dry heat reaching above 37°C (100°F), and conditions are expected to worsen this month. For example, India is predicted to experience an above-average number of heatwave days, with temperatures expected to exceed 45°C (113°F) across parts of northern, central, and western India. Pakistan is also forecast to experience severe heatwaves, with temperatures potentially reaching 50°C (122°F) in some cities. Scorching conditions have already been recorded across Sri Lanka, Thailand, and Malaysia.

At the same time, the National Oceanic and Atmospheric Administration has warned there is approximately a 60% chance of an El Niño developing between May and July this year, increasing the risk of extreme temperatures across parts of Asia and raising concerns that 2026 could surpass 2024 as the hottest year on record.

The convergence of heatwaves and energy disruption creates a particularly dangerous situation for workers and manufacturers alike. The most effective heat mitigation measures in garment manufacturing tend to rely on engineering controls—including improved ventilation, insulation, and cooling technologies—that directly reduce ambient temperatures. Yet, improved ventilation (ceiling and mechanical exhaust fans) and cooling technologies depend heavily on reliable power supply.

The International Apparel Federation commented that this crisis shows the industry’s continued reliance on fossil fuels. Many garment manufacturers across South and Southeast Asia already rely heavily on diesel generators because of unreliable grid systems, particularly during the summer months. But surging fuel prices are making generators increasingly expensive to operate, potentially forcing factories to make difficult decisions about where limited energy is directed—toward keeping production lines running or maintaining cooling systems for workers.

Garment factories already struggle to maintain cooling systems during periods of intense heat, particularly in countries like India where daily summer power outages are common. The fact that extreme heat itself increases electricity demand precisely as fuel shortages and strained grids make energy harder to access is likely to deepen operational strain and worker vulnerability across the region.

For brands, this should serve as an urgent warning and call to action—not a reason to cut and run. Moving orders away from heat-affected suppliers or intensifying pressure on factories already struggling with rising costs and unstable energy supply will only deepen instability throughout supply chains and push the burden of these crises further onto workers.

Instead, brands should be immediately prioritizing:

Adapting purchasing practices through more realistic timelines, stable orders, and flexibility during heatwaves;
Communicating directly with suppliers about how heatwaves and energy shortages are affecting operations and workers—ensuring the heat mitigation becomes a shared responsibility;
Requiring suppliers to monitor temperature and humidity levels so heat risks can be identified and managed;
Supporting suppliers to implement heat mitigation and contingency planning ahead of peak summer temperatures;
Aligning sourcing, operations, sustainability, and compliance teams internally, so commercial pressures do not undermine worker protection efforts.

Effective heat mitigation measures already exist and should be prioritized, even as energy costs rise. Brands must work with suppliers to make this possible and to ensure that rising fuel costs do not cost workers their lives.

As extreme heat intensifies across major garment-producing regions, brands will increasingly need to treat heat not only as a worker protection issue, but as a core sourcing and supply chain resilience challenge.

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