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) Operation

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 double-digit declines in production, sales, and exports, with small and medium-sized enterprises (SMEs) struggling with tighter liquidity. Unemployment has risen, leading to factory shutdowns and marking one of the most challenging periods in the past two decades.

According to data from the Italian Federation of Textiles and Fashion Industry, the sector generated around 45 billion euros in revenue in the previous year—a 16% drop compared to the prior year. Employment in the industry fell to 482,000, a decrease of 26,000 people. Exports dropped to 22.5 billion euros, down 20%, while imports stood at 15.8 billion euros, a decline of 11%. This resulted in a trade surplus of 6.4 billion euros, which fell by 37% year-on-year.

(II) Trade with China

Italian exports of textiles and apparel to China reached 368 million euros in the latest report, a 5.8% decrease compared to the same period last year. This accounted for 1.65% of total Italian textile and fashion exports. On the import side, Italy imported 4.187 billion euros worth of textiles and apparel from China, a 3% drop year-on-year. Despite this, China remained the top source of imports, accounting for 26.3% of total imports. The trade deficit with China was 3.819 billion euros, down 2.7% from the previous year.

(III) Trends in the First Quarter of 2010

Since the start of 2010, the Italian textile and clothing industry has shown some signs of recovery as European and American markets rebounded. According to a survey conducted by the Italian Federation of Textile and Fashion Industry, the output value of the sector remained stable in the first quarter, slightly down by 0.2% compared to the same period in 2009. The textile industry saw a 4.7% increase, while the clothing sector declined by 3.5%. However, order levels rose by 3.2%. Despite these positive indicators, the association remains cautious about the future, citing ongoing challenges such as unstable global economic growth, high raw material costs, euro exchange rate volatility, and limited improvement in credit availability. As a result, the recovery of the industry is expected to be slow, and it may take several years before it returns to pre-crisis levels.