Covid-19 may cause 50% dip in European textile sales

Recent Eurostat data show that the European textile and clothing manufacturing went through a difficult year in 2019, despite good retail sales and export performances. Data for 2019 show an economic slowdown in Europe, with manufacturing remaining under pressure from Brexit and trade frictions. Figures for the textile and clothing (T&C) industry are in line with that general situation: employment declined with over 2 per cent, and the EU27 turnover evolution turned negative for the first time since 2012-2013 with a -2 per cent setback for textiles, and a -1.3 per cent for clothing, compared to 2018.

However, some positive signs are still coming from the retail sales and trade. The growth rate in the retail sales of textiles, clothing, footwear and leather goods in specialised stores remained positive in 2019 (+0.9 per cent). In addition, EU27 trade is now exceeding €170 billion, a +4 per cent increase compared to the previous year. Exports grew at a higher pace than imports.

The outlook for 2020 is expected to worsen due to the coronavirus’ outbreak, as in March 2020 industry confidence fell dramatically. EURATEX is conducting a survey among European companies: preliminary results indicate that more than half of the companies expect a drop in sales and production by more than 50 per cent. Moreover, almost 9 out of 10 companies face serious constraints on their financial situation and 80 per cent of companies are temporarily laying off workers. In addition, 1 out of 4 is considering closing down the company.

"EURATEX, as representative of the textile and clothing sector, is concerned about the crisis and the pressure on the functioning of the internal market. Border controls within the EU have increased sharply, leading to delays in supplies but also cancelling of orders, thus aggravating the economic impact.

"Many companies in the textiles and clothing sector work under strong global pressure, with limited absorption capacity for such a crisis, and this survey shows that measures need to be taken immediately. EURATEX already asked the European Commission to foresee fiscal and financial relieve, ensure a coherent approach across EU Member States and avoid limitations to the free movement of goods and of the workforce," EURATEX said in a press release.

“The EU and its Member States must do all it takes to save our industry. At the same time, this crisis is an opportunity to develop a new blueprint for our sector; the Commission’s new EU Industrial Strategy can offer a basis for rethinking our business model,” said EURATEX director general Dirk Vantyghem.

Fibre2Fashion News Desk (RKS)