State of the EU Textile and Apparel Industry (Updated April 2018)

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EU region as a whole remains a leading producer of both textile and apparel. The value of EU’s T&A production totaled EUR141.2bn in 2016 (Statistical Classification of Economic Activities or NACE, sectors C13, and C14), which was divided almost equally between textile manufacturing (EUR75.8bn) and apparel manufacturing (EUR65.4bn).

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Regarding textile production, Southern and Western EU where most developed EU members are located such as Germany, France, and Italy, accounted for nearly 80% of EU’s textile manufacturing in 2016. Further, of EU countries’ total textile output, the share of non-woven and other technical textile products (NACE sectors C1395 and C1396) has increased from 18% in 2008 to 21% in 2015, which reflects the structural change of the sector.

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Apparel manufacturing in EU includes two primary categories: one is the medium-priced products for consumption in the mass market, which are produced primarily by developing countries in Eastern and Southern Europe, such as Poland, Hungary, and Romania, where cheap labor is relatively abundant. The other category is the high-end luxury apparel produced by developed Western EU countries, such as Italy, UK, France, and Germany.

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It is also interesting to note that in Western EU countries, labor only accounted for 22.8% of the total apparel production cost in 2016, which was substantially lower than 30.1% back in 2006. This change suggests that apparel manufacturing is becoming capital and technology-intensive in some developed Western EU countries because of increased investment in automation technology.

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Because of their relatively high GDP per capita and size of the population, UK, Germany, France, Italy, and Spain altogether account for around 60% of total apparel retail sales in EU.

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Intra-region trade is an important feature of EU’s textile and apparel industry. Despite the increasing pressure from cost-competitive Asian suppliers, statistics from the World Trade Organization (WTO) show that of EU region’s total US$89bn textile imports in 2016, as much as 64.1% (or US$57bn) were in the category of intra-region trade. Similarly, of EU countries’ total US$198bn apparel imports in 2016, as much as 55.6% (or US$110bn) also came from other EU members. In comparison, close to 97% of apparel consumed in the United States are imported in 2016, of which more than 75% come from Asia.

Data source: Eurostat (2018); WTO (2018)

by Sheng Lu

Author: Sheng Lu

Professor @ University of Delaware

24 thoughts on “State of the EU Textile and Apparel Industry (Updated April 2018)”

  1. I find it very interesting how much the increase of automation technology has affected the fashion industry in all parts of the world. Automation technology has especially impacted some developed Western EU. I also found it interesting how much the intra-region trade percentage has decreased in textiles from 2000 to 2016.

    1. I feel the same way. In the class, we mentioned that focusing on making luxury apparel may be the reason why high-wage level western EU countries remain important apparel producers and exporters. Now it seems that automation maybe another factor.

  2. I find it very interesting that 50% of the textile and apparel in the EU is made in the EU, unlike the U.S. where almost 97% of T&A is imported. I supposed this is due to their ability to share resources easily between countries who are part of the EU. I would be interested in seeing data on how much the countries import and export between themselves!

    1. good thinking. Geographic proximity might be a factor. However, data shows that over 70% of us apparel imports come from Asia and only around 17% come from the Western-Hemisphere (i.e. NAFTA and CAFTA-DR members). It is an interesting question why the EU intra-region trade can stay robust.

    2. There are two reasons for the high EU-production: 1. geographic proximity (as Sheng Lu already mentioned) and 2. some EU member states are still having low labour costs and low Transport costs and are therefore still competitive to Asia (e.g. Romania, Bulgaria, even Portugal which is coming back after the financial crisis).

  3. I think it is really amazing that intra-region trade is such a high percentage of total trade in the EU, at 64.1% for the textile industry in 2016, and 55.6% for the apparel industry in 2016. Compared to the U.S., with 97% of apparel imported in 2016, the EU’s ability to produce textiles and apparel domestically is very admirable. However, I am concerned that the percentage of intra-region trade has been decreasing since 2000, when textile intra-region trade was at 78.1% of total trade, and apparel intra-region trade was at 64.7% of total trade. I am concerned that this trend will continue, and the EU will stop producing textiles and apparel domestically, and start importing from countries where they can get a lower cost. I am mostly concerned this trend will continue for medium-priced products, as I believe the high-end luxury apparel products are safe in the EU, since the fact that they are produced in Europe is what adds to their high-end luxury appeal.

  4. It is exciting to see the growth of technology-intensive apparel and textile manufacturing that is begging to occur in Western Europe! While this does mean manufacturing jobs within apparel are dwindling, it shows the growth of these countries’ economies as well as their commitment to innovation. With the use of technology we can see a trend towards sustainability, as these machines can attempt to eliminate waste and streamline efficiency. But, with this new lack of employment forms new issues and these nations will need to work hard to create new industry needs, such as maintenance of these textile machines. As leaders in the EU economy, the UK, Germany, France, Italy, and Spain will need to lead these changes in employment to guide the other members of the EU.

    1. Machines will replace some jobs, but automation will create new jobs as well. We called it creative disruption. The challenge for our fashion program is how to prepare students ready for jobs that may not even exist!!

    2. Hi Melanie! I definitely agree with what you are saying here! It is interesting to see how the United States compares with Western European countries in our shifts toward textiles and technology-intensive materials. Similarly, we are facing the problem of the loss of jobs to machines due to the growth of innovation and technology. As you mentioned, these factories will definitely still need the help of workers to supervise and handle these intense machines. It will be interesting to see how Western European countries combat this issue of unemployment and if there is anything that they do that we could implement here in the United States.

  5. I feel as though the EU as a whole should focus more of their attention on technology and innovation within the textile and apparel market, with the exception of luxury goods. Because of the namesake and the brand history, luxury goods will always come from western Europe, however there should be more attention focused on investing in technology. Although these countries do have a strong intra region trade, I feel as though Asia will soon outpace the intra region trade and ultimately hurt the EU textile and apparel industry in the same way it did to America.

    1. Good thinking! I agree that “Factory Asia” is posting pressures on the intra-region trade pattern in EU. However, overall I think the region production and trade network in EU is more resistant than the western-hemisphere supply chain, because of the luxury component of the production.

  6. While the EU does have major advantages of large luxury houses over other countries, I believe its crucial that the next steps towards creating a stronger textile and apparel industry will come from innovation and technology. Although technology poses a threat of job loss and major adjustment periods in the industry, this could also solve many overarching problems that the industry has always faced. Technology has the ability to prevent unsustainable practices and waste, it can increase the perfection and minimize common factory production mistakes, and also efficiently allow new ways for customization and unique garments. With this implementation of new machinery and technology, the EU will have to plan strategically to prevent major losses in employment to maintain the over all success of the textile and apparel industry.

  7. It is very interesting to see these graphs of the EU industry. Personally, I had no idea that the EU textile and apparel industry was a leading producer for so long. It is clear that intra-region trade has been an important feature of EU’s textile and apparel industry, however, from 2000 to 2016 it had decreased to 64.1%. This to me is a concern because it could be something that leads the EU to stop producing domestically and maybe finding lower costs elsewhere. This also leads me to the fact that automation is affecting so many countries, which makes me think about these statistics in a different light. Another interesting point that caught my attention was that 97% of apparel consumed in the United States are imported, which more than 75% come from Asia.

  8. I think that if the EU continues creating more advanced automation technology and are able to retain their low labor costs, they will be able to become even more of a powerhouse within the fashion and textile industries. However, from these graphs, I can see that most of the production done in the EU goes back into countries within the EU, instead of expanding to the rest of the world. The US, on the other hand, imports 97% of its apparel, with 75% of it coming from Asia. This makes me recognize that Asia is still the leading powerhouse globally, so if the EU were able to create technology that would be able to overpower Asia’s productivity, they may be able to enter more into the US’ market.

  9. It will be interesting to see the effects of Brexit on the EU’s T&A industry. Will it affect the EU”s competitive edge with Asian markets? With the UK leaving the EU, will it make intra-region trade more difficult? And how will the UK negotiate with other European countries so they can remain a player in this market? Brexit may also allow the growth of other EU members such as Germany or Italy, capital intensive countries, that have the resources for innovative technology such as automated manufacturing. Brexit could possibly give room for growth of Eastern European countries as bigger players in the European and global markets.

  10. The relationship between the Western Hemisphere as far as textile trade is interesting. Why is it that it is so successful still meanwhile production costs are notoriously low in Asian countries. Even within the EU many imports are from other EU countries, how are they affording this? Also, automation within the textile and apparel industry is a GOOD thing! While in the short run it will cut employment from tradition production jobs, in the long run it will provide new opportunities in the job market.

  11. It is fascinating to see the high EU production rates that can be attributed to the geographical advantages of intra-region trade and domestic production. It is also great to see the decrease in apparel production cost as a result of technological advancements. These advancements keep production costs low and prevent the EU from having to outsource products in an effort to find cheap labor. However, it is concerning that labor costs in production have decreased by 7.3% since 2006. This raises concerns because technology is replacing the jobs of workers within the supply chain, which can create problems such as increased unemployment rates.

  12. It’s almost funny to read the statistics showing that the labor costs are decreasing for apparel manufacturing in western, more developed countries, clearly due to the fact that there has been significant increase in automation and increase in capital put towards technological advancements for that improved automation. The reason I find this funny is because President Trump is so set on bringing back manufacturing work to the United States in hopes to give jobs to Americans, when quite frankly, the jobs wouldn’t be going to people they’d be going to machines. The U.S. is a very developed country and I think it would be in our best interest to focus on instead investing our capital in education to provide Americans with the skillsets to do the jobs that do exist in the U.S. – those being jobs focused on sourcing and technology and automation.

    1. Kate, I definitely agree with what you are saying! I think that it could prove helpful for the current administration to look to other developed countries to see how we could similarly compare. As we discussed in class, the United States doesn’t even competitively produce apparel anymore, we are more focused on textiles and specialized technologies. The same could be said for these developed western countries.

  13. I agree with most of the comments made here that it is ironic that there is such a focus on bringing manufacturing jobs back to American and in general, when the countries that are doing the best in the apparel industry currently have turned to automation to get ahead. The graphs and statistics cited above show that labor is appearing to be less costly in Western and Southern Europe, while Eastern Europe is still thriving more substantially. It makes me wonder that after years of chasing the lowest cost for apparel, if the focus is shifting more to speed and quality control through automation.

  14. I think that it is interesting that the EU textile and apparel industry seems to be moving toward a similar structure that has been established in the US. The fact that the EU industry has seen a decreased in labor percentages shows that the industry is becoming more capital intensive, indicative that most apparel manufacturing is being outsourced. Additionally, along with moving toward being more capital intensive, the EU T&A industry moves toward a more technologically advanced industry. These two factors show the success of the industry in recent years and communicates that the EU industries are achieving success. One fact of the article that I found surprising is that the EU market is said to be divided into only two categories; the middle-priced market, and the high-end luxury market. It definitely makes sense that the EU nations are not ones who neglect quality when it comes to purchasing garments, however, with such a large population I thought that were would still be somewhat of a demand for low-price goods as there is in the United States.

  15. I find it interesting that within the EU, luxury goods are produced in the West, and mass-market, mid-priced goods are produced in the Eastern and Southern areas. It makes sense to me in terms of cost, since the Eastern and Southern areas provide cheaper labor costs and luxury retailers are willing to pay more to create a higher quality product. I wonder if any luxury good retailers have ever thought to move their production to the areas of cheaper labor, and vice versa with mass-market retailers, since realistically everyone is trying to save costs in terms of production.

  16. It is interesting to read that labor costs were significantly lower in Western EU countries now than they were in the past 10 years. It is clearly a sign that these countries are investing more into automotive technology. However, this can have strengths and weaknesses and I would be interested to see if the majority of people working in this industry appreciate the new technology or if it is negatively effecting employment.

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