The €205 billion textile and clothing industry in Europe has not escaped the broad economic decline that has shaken the world since the outbreak of the Covid-19 pandemic. The unprecedented disruption of trade, manufacturing and retail activities, with the ensuing severe economic crisis, will see European textiles and clothing falling by 19 percent in 2020, with a 9 percent decline in GDP in euro area countries, the analysts of Euler Hermes believe.
“We predict that in 2021 turnover will rebound by 15 percent, but it will return to pre-crisis levels not sooner than in 2023, assuming a progressive improvement in the global epidemic situation and providing financial support for the economy,” Aurélien Duthoit, Sector Advisor for Retail, Technology and Household Equipment at Euler Hermes, said.
Despite substantial support from a variety of job retention programs and high funding levels, by the end of 2021, employment in the industry in the EU will be cut by 8 percent (around 158,000 jobs) and 6 percent of companies (around 13,000) may disappear. The share of SMEs in the total turnover of the textile industry is twice the average of the European manufacturing sector, which makes the industry more sensitive to the current situation.
The Polish textile sector consists of approximately 25,000 companies employing 145,000 people. Local industry turnover has increased by around 20 percent over the past five years 2015-2019 thanks to increased demand and exports to Germany. Despite significant signs of recovery, in the period from January to May, sales of the Polish textile sector fell by as much as 15 percent y/y. In the opinion of Euler Hermes analysts, from the European perspective this industry is still much more resilient and competitive than in 2009, which makes it a better candidate to return to normalcy.