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Euratex: European textile and clothing industry recovering but new challenges ahead

By Simone Preuss

Oct 11, 2021

Business

Mentatdgt, Pexels

The European Apparel and Textile Federation (Euratex) has analysed latest economic data and confirmed further recovery of the textile and clothing industry from the corona pandemic: While the textile activity has now surpassed its pre-pandemic level from the fourth quarter of 2019 by 3.6 percent, the clothing sector still remains 11.5 percent below those levels but continues to improve. However, this recovery may be disrupted by the current supply chain and energy problems is what the organisation finds.

Image: Euratex
“This fragile recovery is hampered by higher shipping costs and a price increase in raw materials and energy. The cost of energy, in particular gas, has increased more than three times since the beginning of this year. Since the announcement of the EU’s 'Fit for 55' package, we have seen CO2 prices rising above 60 euros.

This inevitably has an impact on the industry’s competitiveness, especially in a global context. The future recovery is also threatened by some factors limiting production, such as shortage of labour force and equipment, which are putting additional pressure on textile and clothing industries industries,” warns Euratex.

Quarter-on-quarter, the EU turnover showed signs of improvement across the sector. The textile turnover increased by 3.3 percent in the second quarter of 2021, after slightly contracting in the first quarter of 2021. Similarly, the business activity in the clothing sector expanded by 7 percent in the first quarter 2021 after an increase of 1 percent in the previous quarter.

Image: Euratex
“Our companies have shown great resilience during the pandemic, and their latest export performance is an encouraging sign of recovery. This recovery may, however, be disrupted by the current supply chain and energy problems.

Once again, recent developments show that this transition towards more sustainable production can only work if organised in a global context, avoiding carbon leakage and with an effective level playing field. This must be considered in the upcoming EU Textiles Strategy,” commented Euratex director general Dirk Vantyghem in a press release.

The organisation also found that in the second quarter of 2021, the EU-27 trade balance for textiles and clothing improved, resulting mostly from an increase of export sales across third markets and a drop of textile imports.

“Textile and clothing extra-EU exports boomed by 49 percent as compared with the same quarter of the previous year. Textile and clothing extra-EU imports went down by 26 percent as compared with the same quarter of the previous year, following a decrease of imports from some main supplier countries.

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

Image: Euratex
Job creation slowly stabilised quarter-on-quarter (-0.2 percent) in the textile industry, while employment in the clothing sector continued to be affected by lower levels of production activity during the first part of the year (-1.2 percent). When compared to the pre-pandemic level in the fourth quarter of 2019, EU employment was 4.4 percent lower in the textile industry and 11.8 percent lower in the clothing industry in the second quarter of this year.