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).
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.
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.
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.
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.
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