Economic up-trade leaves traces in German textile sector and clothing seems to timidly follow
The overall view is that turnover and labour are increasing in the first four months in textiles, this is the major finding of Textil+Mode, the German umbrella organisation of textiles and clothing
Most of all textiles are benefiting from the economic upward trend. However, there is also a row of hints that clothing is returning on a positive growth path: The sector’s seasonally adjusted turnover index and order logs are actually markedly increased. Also the Ifo-Index is the basis for a cautious optimism for the months ahead.
Proceeds are increasing January to April 2016 by 1.0 % year on year. As in months before the plus is based on the textile market segment (+ 4.8 %), whereas the clothing segment is negative with -4.6 %. In April turnover figures in textiles are positive with 5.6 % growth and in clothing the plus was 2.3 % against March.
The labour situation’s development is further divided, the workforce in textiles is increasing in April by 2.0 %, but decreasing in the clothing industry by 2.5 %. The occupational situation remains robust resulting in a positive situation for both segments with 0.4 % more people employed year on year. It is noteworthy that the occupational indicator is a following factor, thus it is to be expected that the clothing segment will show a diminishing workforce under the estimate that turnover will further decline.
Working hours are 1.7 % over year on year (textiles + 3.3 %, clothing -1.6 %). Also domestic production is reflecting the economic situation, while textiles showed an increased production of 1.4 % in the first four months, but the value for clothing decreased 2.2 %, however in April the production value of clothing increased by 16.6 % (textiles +3.9 % year on year).
Also the order situation shows an April improvement of the clothing sector in April. Order intake however was negative over the four months (-3.8%), but in April these are positive with a plus of 12.8 %. The textile segment’s order intake showed a plus of 1.5 % each.
Order log markedly increased for clothing in April by 12.6 %, and for textiles the plus was 6.3 %, allowing a capacity load of 1.9 months for textiles and 3.5 months for clothing.
Producer prices for textiles remain very stable (zero changes in the first four months), and the increase for clothing levels since some months at a plus of around 1.5 %.
Retail turnover of clothing has been negative at the beginning of 2016 (-1.2 % end of April), but the month of April was with +0.6 % slightly positive. Total German retail proceeds increased in April by 2.0 %.
Final products exports in textiles were increasing in the first four months by 0.8 %, and in clothing by 1.2 %. Textile final products exports are in the same period are exactly comparable year on year, but the clothing imports increased slightly by 0.4 %, thus the trade surplus of both segments is decreasing by 1.7 % against March.
The Ifo economic index December 2015 to June 2016 confirms that the forecast for the two sectors is around the zero point, however the estimates from textile enterprises seem to be slightly decreasing, by contrast the textile segment is since a distinctive period in an uptrend, therefore the more sceptical estimate does not necessarily mean negative results. The clothing segment has to face since the beginning of 2016 difficult times, however the up-trending estimates and expectations indicate a short time improvement of the situation.