European textile and clothing manufacturing could suffer a 50 percent
drop in sales and production due to the Covid-19 pandemic as they struggle
with the financial and logistical implications of the crisis, new data
suggests.
An ongoing poll by the European Apparel and Textile Confederation
(Euratex) of European companies found that over half of them expect a fall
in sales and production by more than 50 percent, while almost nine out of
10 say they face serious financial constraints.
Eighty percent of the companies are already laying off workers and a
quarter said they are considering closing down completely.
Recent Eurostat data revealed that European textile and clothing
manufacturing was already struggling in 2019 despite good retail sales and
export performances, with the ongoing spread of the novel coronavirus
expected to worsen that trend.
‘Measures need to be taken immediately’
In 2019, the EU27 turnover evolution turned negative for the first time
since 2012-2013 after experiencing a 2 percent drop in textiles and 1.3
percent drop in clothing, compared to 2018. On a more positive note, the
growth rate in the retail sales of textiles, clothing, footwear and leather
goods in specialised stores remained positive in 2019, growing 0.9 percent,
while EU27 trade is now exceeding 170 billion euros, a 4 percent increase
compared to the previous year.
“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 cancellation of orders, thus
aggravating the economic impact,” the organisation said in a statement.
“Many companies in the textile 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
relief, ensure a coherent approach across EU Member States and avoid
limitations to the free movement of goods and of the workforce.”
Director General Dirk Vantyghem said: “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.”
Photo credit: Mentatdgt, Pexels
