THE CLOTHING AND TEXTILE INDUSTRY DECLARES THAT THE WORST OF THE CRISIS HAS ALREADY PASSED
Foreign demand increased over the first four months of the year
Some 75% of Spanish exports go to the European market
The textile trade ended the year 2009 with a 7% lower turnover figure than that of the previous year
Report produced by SIMM, the Madrid International Fashion Fair, with information furnished by FEDECON, FECOTEX, ACOTEX and CITYC
The textile and clothing industry is not immune to developments within the Spanish economy as a whole. Over the first four months of the year 2010, the domestic market continued to perform poorly, in line with other consumer goods markets in Spain. However, thanks to the growth in foreign demand within the industry, the overall results were not that negative. This much has been confirmed by theTextile and Clothes Manufacturing Information Centre (CITYC) in its analysis of the economic situation within the industry, which declares that "the worst of the crisis has already passed". This conclusion is shared by the various different representatives of this industry.
The latest figures from CITYC, which correspond to the first four months of the year, reveal the favourable growth in foreign demand within the textile and clothes manufacturing sector, based on a 2.5% increase in exports compared to the same period the previous year. France, Germany and Italy, as well as the Asian countries and the countries of North Africa, make up the destinations where Spanish companies have carried out the largest and most successful sales campaigns. For their part, imports decreased by 0.2%.
Growth in demand within the industry has had a favourable effect on overall production, which means that it has been able to leave behind the extremely negative growth rates of the year 2009 (-20.3 % on average over the year). Up until April 2010, production came to -2%, focusing mainly on the growth in textiles, whilst clothes manufacturing continued to reveal negative figures.
This relative improvement is also reflected in the employment figures. In this respect, employment decreased by 9% in May 2010, compared to 16% in the same month last year. Furthermore, the number of employees affected by lay-offs fell by half during the first quarter of the present year compared to the same period in the year 2009.
The President of the Spanish Clothing Companies Federation (FEDECON) and Chairman of the SIMM Organising Committee, Ángel Asensio, declares that "a process of natural selection has taken place within the Spanish textile industry during these years of crisis, which has left only the strongest brands and most competitive products on the market". According to figures furnished by CITYC, Spain currently has 5,115 clothing companies, which account for some 163,000 jobs.
TEXTILES / CLOTHES MANUFACTURING INDUSTRY
2009
Companies 5,115
Employment 165,400
Production (million) 8,750
Added value (million) 4,025
Foreign trade
Imports (million) 11,795
Exports (million) 7,821
Trade balance (million) -3,974
Source: CITYC
The Spanish Textile Trade
As far as the textile trade is concerned, turnover in 2009 was 7% lower than the previous year, according to the latest edition of "The Textile Trade in Figures", which will be presented within the framework of the current edition of SIMM, the Madrid International Fashion Fair.
According to the barometer that ACOTEX (The Textile and Accessories Trade Association) produces on a monthly basis, sales within the sector were 2.99% lower during the first half of the year compared to the first six months of the previous year.
Borja Oria, the President of ACOTEX, has analysed the figures for his sector over the first half of the year: "The first six months of 2010 were very much in line with those of 2009. This situation has a positive side, because it means that the sector is no longer in freefall. However, we must not forget that the figures that have been recorded are still way below those achieved in the years 2006 and 2007". Borja Oria points out that the Spanish textile trade contracted by 11% in 2008 and by 7% in 2009. According to forecasts made by ACOTEX, the present year will end with similar results to those of last year.
BAROMETER FOR THE TEXTILE TRADE
2010 Jan Feb Mar April May Jun Accumulated yearly percentage
-2.99%
-8.0 %
-4.2%
-1.2%
7.3%
-5.1%
-3.9%
Source: ACOTEX
For his part, Hilario Alfaro, the President of the National Textile Trade Federation, FECOTEX, offers a favourable evaluation of the employment figures within the sector and highlights the fact that the industry generates high-quality jobs of long duration. "Our sector", he explains, "has an unemployment rate of 10.5%, when the national average rate of unemployment in the rest of the economy comes to 20%". According to figures published in "The Textile Trade in Figures", clothing fashion shops in Spain employ more than 213,000 people.
The Rise in VAT Will Also Affect the Textile Trade
Borja Oria points to macro-economic factors relating to the Spanish economy as a whole, as well as to consumer confidence, as the greatest causes for concern regarding the textile trade at present, to which we must also add the rise in VAT, a measure that came into effect in July of this year. In this respect, Hilario Alfaro states that the rise in VAT has the sole effect of impoverishing companies and families, with the consequent reduction in consumer spending.
Alfaro believes that the textile trade is a mature sector, one that has achieved the objectives that were set out three or four years ago in terms of improving product quality and boosting specialisation. "Now we must focus our efforts on improving customer service and attention when purchases are about to be made", the President of FECOTEX explains.
Prospects
The prospects outlined by CITYC for the rest of the year indicate a progressive recovery regarding activity levels within the textile industry, based on the favourable growth in exports, although the domestic market will continue to retract. In this respect, the improved performance within the industry will be conditioned by developments within the European markets, which is where some 75% of Spanish exports end up.
According to forecasts made by FEDECON, the year 2010 will end with similar figures to those of 2009 or slightly better figures than last year, although the results will still be worse than those that were recorded two or three years ago. Ángel Asensio, the President of FEDECON, is optimistic about the winter season and the Christmas campaign: "The drop in consumer demand for textile items over the last two years has meant that clothing has grown older. In this respect, we expect consumers to renew part of their wardrobe this winter, which will provide a boost for the campaign". He adds: "Consumers still lack confidence. Nevertheless, the market is adapting little by little to the current economic situation and sales will not fall any further".
The Tourist Crisis and Drop in Consumer Spending Affect Swimwear Sales
As far as swimwear fashion is concerned, these items have also suffered the consequences of the crisis. The fall in consumer spending and the poor year that has been witnessed within the tourist industry have both left their mark on the foreign trade. In this respect, imports have fallen by 15% in terms of value, which reflects the negative state of Spanish consumer spending, whilst exports have almost halved their value compared to the year 2008. Nevertheless, the reduction of 4% in terms of value is lower than that witnessed by other kinds of clothing throughout the same period.
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