Europe and the United States market pick up the improvement of the operation status of the Italian textile and garment industry

Business Club – August 20th

(I) Operations

The Italian textile and clothing industry, known for its outward-oriented approach, has been significantly impacted by the global financial crisis. The sector has faced a severe downturn, with double-digit declines in production, sales, and exports. Small and medium-sized enterprises (SMEs) are struggling with tighter liquidity, while more workers have found themselves unemployed, leading to reduced factory activity. This marks one of the toughest years for the industry in the past two decades.

According to data from the Italian Federation of Textiles and Fashion Industry, the sector generated approximately 45 billion euros in sales revenue, representing a 16% drop compared to the previous year. Employment in the sector fell to 482,000, a decrease of 26,000 people. Exports totaled 22.5 billion euros, down 20%, while imports reached 15.8 billion euros, a decline of 11%. Despite this, the trade surplus stood at 6.4 billion euros, although it dropped by 37% from the previous year.

(II) Trade with China

Data from the Italian Foreign Trade Commission shows that Italy’s textile and apparel exports to China amounted to 368 million euros in the reporting period, a 5.8% decrease from the previous year. This represents 1.65% of total Italian textile and fashion exports. On the import side, Italy imported 4.187 billion euros worth of textiles and clothing from China, a 3% drop year-on-year, but still accounted for 26.3% of total imports—making China the top source of imports for the sector. The trade deficit with China stood at 3.819 billion euros, down 2.7% from the same period last year.

(III) Trends in the First Quarter of 2010

Since the start of 2010, the Italian textile and apparel industry has seen some signs of recovery as European and American markets began to stabilize. According to a survey conducted by the Italian Federation of Textile and Fashion Industry, the sector’s output remained relatively stable in the first quarter, showing a slight 0.2% decline compared to the same period in 2009. The textile industry saw a 4.7% increase, while the clothing sector experienced a 3.5% drop. Meanwhile, orders rose by 3.2%.

Despite these improvements, the industry remains cautious about the future. The association points to several challenges, including unstable global economic growth, high raw material costs, ongoing speculation around the euro’s exchange rate, and limited progress in easing credit constraints. These factors suggest that the recovery will be slow, and it may take some time before the sector returns to pre-crisis levels.