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Theoretical background: The Polish textile and apparel market is one of the biggest and the most dynamically growing markets in Central and Eastern Europe. This industry is characterized by high dynamics of changes, both seasonal and at the business cycle frequency.

Purpose of the article: A synthetic description of the situation in the textile and apparel industry in Poland and its evolution, as well as the assessment of the impact of selected determinants on the business climate indicator in this industry.

Research methods: The article resorts to descriptive analysis based on monthly data on the general economic climate index in the textile, apparel and footwear industry in Poland published by the Central Statistical Office in Poland during the period January 1994 – June 2020, and the vector autoregression model that was used to assess the impact of prices, the general economic situation of companies, sales, inventory, financial situation of companies and unemployment rate to assess the economic situation in the analysed industry. Due to limited data availability for the 1990s, a structural break occurring in January 2006 and the outbreak of the COVID-19 pandemic, the model was estimated for the period 2006–2019.

Main findings: Conducted analysis revealed structural changes occurring in the Polish textile and apparel industry. The period 1994–2005 was characterized by much lower values of the general business climate indicator and much greater variability in terms of seasonality than the later period. The use of VAR(12) model allowed to confirm a negative impact of rising prices and faster growth of the unemployment rate, as well as a positive impact of greater sales and increase in inventory on business climate in the textile and apparel industry. Conducted analysis also demonstrated limitations of forecasting in case of unexpected shocks such as the outbreak of the COVID-19 pandemic.