European textile and clothing industry recovering, but new challenges ahead

The European Apparel and Textile Federation (Euratex) has analyzed the latest economic data and confirms that the textile and clothing industry has continued to recover from the corona pandemic: While textile activity has now surpassed the pre-pandemic level of the fourth quarter of 2019 by 3 .6 percent, the apparel sector still remains 11.5 percent below that level, but continues to improve. However, this recovery could be disrupted by current supply chain and energy supply issues, the organization notes.

Image: Euratex

“This fragile recovery is being hampered by higher transport costs and a rise in the price of raw materials and energy. The costs of energy, especially gas, have more than tripled since the beginning of this year. Since the announcement of the “Fit for 55” package of In the EU, CO2 prices have risen above EUR 60.”

“This inevitably affects the competitiveness of the industry, especially in an international context. The future recovery is also threatened by a number of factors limiting production, such as labor and material shortages, which will put additional pressure on the textile and clothing industry,” warns Euratex.

On a quarterly basis, EU sales across the sector showed signs of improvement. Textile sales increased by 3.3 percent in the second quarter of 2021, after contracting slightly in the first quarter of 2021. Activity in the clothing sector also increased by 7 percent in the first quarter of 2021, after a 1 percent increase in the previous quarter.

“Our companies have shown great resilience during the pandemic, and their latest export performance is an encouraging sign of recovery. However, this recovery may be disrupted by current supply chain and energy supply challenges.”

Image: Euratex

“Once again, recent developments show that this transition to more sustainable production can only work if it is organized in an international context, avoiding carbon emissions and providing an effective level playing field. This should be taken into account in the upcoming EU textile strategy,” said Dirk Vantyghem, Director General of Euratex, in a press release.

The organization also found that the EU-27’s trade balance for textiles and clothing improved in the second quarter of 2021, mainly due to an increase in exports to third markets and a decrease in textile imports.

“Extra-EU textile and clothing exports are up 49 percent from the same quarter of the previous year. Extra-EU textile and clothing imports are down 26 percent from the same quarter of the previous year , due to a decline in imports from some key supplier countries.

EU imports from China and the UK collapsed due to a combination of Brexit and weaker demand in Europe,” Euratex summarizes.

Image: Euratex

Job growth in the textile industry slowly stabilized on a quarterly basis (-0.2 percent), while employment in the garment sector continued to suffer from lower manufacturing activity (-1.2 percent) in the first part of the year. Compared to pre-pandemic levels in the fourth quarter of 2019, employment in the EU in the second quarter of this year was 4.4 percent lower in the textile industry and 11.8 percent lower in the garment industry.

This article first appeared on FashionUnited.UK, then translated and edited into Dutch by Ilona Fonteijn.

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