Germany’s textile and clothing industry – still no turnaround

After some months of declining in the economic trends there are still no signs of a turnaround. The respective economic data are negative. Also, the occupational data is in a downturn. Clothing is looking a bit better, in particular in foreign trade, however from a low basis. Also the actual ifo-numbers are not indicating a clear turnaround.

The month of October 2019 shows against the previous month for both segments a marked downturn: Turnover in Textiles by -5.1 % and clothing -5.7 %. For 2019 per October the figures are likewise: For both sectors proceeds indicate -2.5 % below the level of 2018, textiles -3.4 % and clothing – 0.9 %, all are based on a lower level. In view of these figures. no change is expected for the entire 2019, as the early indicators suggest no change in the negative tendence. Total forecasted decline in turnover 2019 is around -2 %.

Also occupation is easing due to months long declining proceeds: At the end of October the figures for textile were 4.6 % and -0.9 %for clothing. The average figures for January to October improved in both segments (-2.8 %, respectively + 0.5 %). This means that increasing occupation is ceasing. The two sectors show -3.4 % less jobs at the end of October, in the ongoing year results an average of – 1.7 %.

Also domestic production shows a further sinking tendence, textiles somewhat less marked as clothing. In the first 10 months production of textiles shows a decline of 0.5 %, and clothing of 4.9 %.

The order situation is for both segments at the actual edge rather declining, also here clothing a bit less.

Producer prices increased steadily and lightly, textiles cannot increase prices, the average increase per October remains at +0.9 %. A bit better is the situation in the clothing segment with +1.2 %

Proceeds in the special retailing has improved somewhat after a very dissatisfactory beginning of 2019, but they decreased -0.3 %in the actual month of October. This meets the annual trend: Total German retailing was profiting of increasing proceeds (+3.5 %, January – October 2019) and better consumer sentiment in Germany, whereas clothing retailers report up to now and within nine months a small increase of 0.1 %.

In Foreign Trade, textiles are developing negative: -2.6 % in exports and -1.7 % in imports per October. The values for clothing: +5.2 % more exports and +0.7 % more imports. Thus, textiles could not profit from the relatively good sentiment in foreign trade.

Import surplus declined per October by -5.5 %. The raw material imports sank in the first nine months of 2019 by -4.9 %.

The ifo-economic climate index of December 2019

The total manufacturing sector could stop – close to the end of 2019 – the descent in economic forecasts. The industry is no longer pessimistic as the continuous lower figures of the past months suggested. If this is also true for the textile and clothing industries remains doubtful. Textiles is located at a very low sentiment level, whereas for clothing the sentiment is more optimistic, but if this means the introduction of a turnaround remains open, especially because of the low level start at the beginning of 2019.