Corona virus may cause a 50% drop in sales and production
Data for 2019 show an economic slowdown in Europe, with manufacturing remaining under pressure from Brexit and trade frictions. Figures for the textile and clothing (T&C) industry are in line with that general situation: employment declined with over 2%, and the EU-27 turnover evolution turned negative for the first time since 2012-2013 with a -2% setback for textiles, and a -1.3% for clothing, compared to 2018.
However, some positive signs are still coming from the retail sales and trade. The growth rate in the retail sales of textiles, clothing, footwear and leather goods in specialized stores remained positive in 2019 (0.9 %). In addition, EU-27 trade is now exceeding €170 billion, a 4% increase compared to the previous year. Exports grew at a higher pace than imports.
The outlook for 2020 is expected to worsen due to the corona virus outbreak, as in March 2020 industry confidence fell dramatically. Euratex is currently conducting a survey among European companies: preliminary results indicate that more than half of the companies expect a drop in sales and production of more than 50%. Moreover, almost 9 out of 10 companies face serious constraints on their financial situation and 80% of companies are temporarily laying off workers. 1 out of 4 is considering closing down the company.