|  14.11.2013

Textile output slows down abruptly in 2012

The production of textiles slowed down abruptly in 2012, when it increased by a mere 1.5% y/y from the 10.5% y/y rise recorded in 2011, according to our calculations based on revised official statistics. The textile output recorded positive annual performance for the third year in a row, but remained however by 4.9% below the 2008 level.

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After the double-digit plunge in 2009, the industry started picking up, but the pace tempered in 2012, as the activity in the sector was negatively affected by diminishing external and local demand, which added to overall adverse market circumstances. Some producers managed to offset the overall declining demand by refocusing towards niche areas, such as industrial textiles. The clothing apparel production slid in the negative area last year, when it dropped by 2.2% y/y, after having inched up by 1.7% y/y in 2011. 

The clothing production in 2012 was roughly at the same level as in 2009, when the industry’s output witnessed 25.5% y/y annual plunge. The companies are facing shrinking demand and smaller producers and exporters particularly are struggling with tighter time frames for completing small orders. Only few of the apparel producers have developed own brands and are present in the retail chains with clothing lines, as most of them continue to focus on orders under lohn system. 
The exports of textiles, wearing apparel and leather goods dropped by 1.6% y/y to nearly EUR 5.2bn in 2012, as the sector was affected by shrinking external demand, in the context of the global economic crisis. The share of the sector’s exports also diminished to 11.5% of total exports in 2012, from 11.7% in 2011. The trade balance remained positive, at about the same level in the past two years (EUR 408.4mn in 2011 versus EUR 408.8mn in 2012), according to data from the Department for External Trade. 
Imports dropped by a similar annual figure, to nearly EUR 4.8bn, in 2012, accounting for 8.7% of the country’s imports last year.  The exports’ performance however varies widely across market segments. Exports of knitted or crocheted apparel declined marginally by 0.9% y/y in 2012, while exports of apparel not knitted inched up by 0.2% y/y last year. The two segments accounted for 2.1% and respectively 4.1% of the EU27 total exports value in 2012, roughly the same level as in the previous year, according to our calculations based on European Commission and Eurostat statistics. Exports of footwear, gaiters and similar products, on the other hand, dropped more abruptly, by 7.2% y/y to nearly EUR 1.3bn in 2012, accounting for 4.1% of EU27 total footwear exports last year. 
The Romanian footwear producers export in over 150 countries and project some 5% y/y advance of external deliveries this year, according to projections of producers’ association Sfera Factor. 
Italy remained the top export destination for major textile, apparel and footwear products in 2012. It accounted for 57.1% of footwear exports, 40.3% of total knitted textiles and 21.6% of total not knitted textiles in 2012. Other top destinations for textiles and apparel in 2012 were Austria and the United Kingdom, while footwear top 3 export destinations included Austria and Germany. Interestingly, even though China is cited as being among the top import countries for textiles, clothing and footwear, the country actually ranked 4th and 5th among import countries for the major categories last year. The top import source was Italy, while other major partners were Germany, Austria, Spain and Slovakia. … 

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