The German economic situation at the verge of the Covid-19 downturn and the focus on textiles and clothing

The actual figures of the economic situation are reaching up to February 2020, and, these are only partially influenced by the pandemic. Imports and raw material imports already showed a marked downtrend. Also other key figures such as turnover and occupational facts were impeded markedly by the crisis, also the ifo figures show record high downturns.

Also in the new year turnovers show a sinking tendance, alike it was the case already at the end of the past year. In February they showed a drawback at German Textiles by further -2.0, and clothing by -4.5 %, offering proof of the first influence of the Corona crisis, a crisis that will show the full impact in March 2020. The two segments reported in February 2020 a minus of -3.0 %.

The occupation was also further on a downgrade and the breakdown of capacities was accelerating: for Textiles -3.3 % and -5.8 % for clothing on average of the first two months. At the end of Feruary resulted -3.4 % less people occupated in textiles and -6.4 % in the clothing segment as compared to the same period in 2019.

In addition domestic production sank in both segments since the beginning of 2020, namely in textiles -4.4 % in textile and – 8.9 % in clothing.

The order situation has drawbacks for both segments in the past months and is manifested also in ordering logs.

Producer prices are increasing only slightly over the past months, mostly in textiles. The increase amounts to +0.3 % since the start of the year, this is even less than in 2019. In the clothing sector the prices increased a bit more accentuated, in the ongoing year by +0.7 %.

The proceedings in the special clothing retail increased in February somewhat by +0.6 %, but markedly below the value of the total German Retail who increased as of February 2020 + 5.8 %.

Foreign trade is showing for several month the same trend: increases in clothing exports (+4.3 %), realised amid weak domestic economic situation.,whereas the drawback of Textile exports laid at –3.2 %. The import figures reflext already the pandemic, the drawback reported for clothing was 2.8 % and textiles – 6.6 %. As a result the import surplus sank per February 2020 markedly by -16.0 %.

Raw material impors sank in comparison to 2020 by -22.7 %, registering the first signs of the pandemic in China in view to volume and price volumes.

Ifo-Economic Index

In April 2020 the extent of the pandemic affected the firms to the fullest: The values dropped with a unique speed on the lowest lebels since the financial crisis. This is also reflected for the Textile- and Clothing industry, as for the total manufacturing sector. Including trade and service results actually the historic lowest economic barometre recorded. Particularly negative are the economic expectations for the coming months. Since the economic activites, based upon the easing of the lockdown of the pandemic protection rules since the registation of the ifo-figures in mid-April only slowly gaining speed, the recovery will not take place shortly.