European textile and apparel manufacturers in dire straits

By

Matthieu Guinebault

Translated by
Nicola Mira

Published
Apr 2, 2020

A number of observers have predicted that Covid-19 will accelerate the process of manufacturing re-localisation, but Euratex, the European Apparel and Textile Confederation, is witnessing a different phenomenon. No fewer than 80% of the industry’s companies are cutting jobs, while for half of them, sales and manufacturing output have fallen by over 50%.

These figures, coming from the EU’s statistics office Eurostat, are some of the findings of an ongoing survey commissioned by Euratex. Nearly nine out of 10 companies have indicated they are already experiencing severe financial difficulties. Above all, one in four is now considering ceasing trading altogether.

In addition to a manifest slump in demand, caused by the uncertainty about how much time will pass before normal operations will be resumed, Euratex has identified an aggravating factor: intra-European border checks. These are said to be worsening delivery delays, heaping even more pressure on the industry. A situation that has led Euratex to ask the European Commission to ease such checks, and to provide fiscal and financial support.

“The EU and its member states must do everything in their power to save our industry,” said the General Manager of Euratex, Dirk Vantyghem. “At the same time, this crisis is the opportunity to devise a new business model for our sector. The new EU industrial strategy introduced by the European Commission could act as the basis for an overhaul of our model,” he added.

The European textile and apparel industry had a tough year in 2019. It lost 2% of its jobs, and industry sales fell for the first time since 2012-13, with the textile sector losing 2% and the apparel one losing 1.3%. Euratex saw a glimmer of light in the fact that aggregate sales for fabrics, clothes, footwear and leather products increased by 0.9%. European textile and apparel trade with the rest of the world grew by 4%, and was worth €170 billion.