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Euratex expresses concerns over supply chain disruptions following COVID-19

  

In its Quarterly Economic Update, Euratex has expressed concerns over global supply chain disruptions following COVID-19 crisis which may affect the competitiveness of the industry.

Economic data up to December 2020 reflect a dramatic contraction in demand and production of textile and clothing items, caused by the COVID-19 pandemic. Over the full year 2020, the EU turnover fell by -9.3 per cent in textiles and by -17.7 per cent in clothing, compared with 2019. The crisis was particularly felt in the middle of the year. Towards the last quarter of 2020, business activity recovered in the textile industry, while it further deteriorated in the clothing sector, as a result of the decline in consumption expenditure and the slowdown in non-essential activities.

T&C extra-EU exports slipped back by -13.6 per cent in 2020. The majority of EU top-10 customers experienced a steep decline in 2020. EU imports increased by +5.5 per cent in 2020. However this increase was mostly due to the import of personal protective equipment (including facemasks), especially from China.

Looking forward, the EU Business Confidence* indicator of March 2021 gained momentum, with a confirmed upward trend in the textile industry (+3.8 points), and a modest recovery in the clothing industry (+1.6 points). Also, the employment expectations indicator saw a robust increase.

However, these signs of recovery are jeopardized by recent turmoil in the T&C supply chain. Raising prices of raw materials and transport costs, negative impact of CO2 prices and political turmoil in some important sourcing countries create uncertainty, adding to the challenges of the corona pandemic.

 
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