Eurozone Economic Growth Modest in 2024
Table of Contents
- 1. Eurozone Economic Growth Modest in 2024
- 2. International Trade Sees Shifts
- 3. Retail Trade Charts Modest Growth
- 4. Used Textile Industry Faces Crisis
- 5. CIRFS Recommends a Sustainable Approach
- 6. French Economy Shows Signs of Stability Amidst Global Uncertainty
- 7. Consumer Prices Rise Marginally in France
- 8. Cambodia Remains a Key Apparel Supplier to France
- 9. German Textile Trade Faces Headwinds Amidst Sustainability Push
- 10. Trade Performance Under Pressure
- 11. Order Shortages Grip German Markets
- 12. Sustainability Takes Center stage
- 13. Italian textile Machinery Faces Weak Demand
- 14. Orders Falter in First Half
- 15. Dutch Apparel Market: Exports and Imports Decline in First Half of 2024
- 16. Spanish Textile Recycling Initiative Aims for circularity
International Trade Sees Shifts
The euro area experienced modest economic growth in 2024, largely driven by external demand, even as consumer spending remained sluggish and investment hesitated. While EU exports declined, trade surpluses expanded. The textile industry faced a crisis marked by oversupply and waning demand. Major economies like France, Germany, Italy, and Spain each encountered unique challenges within the textiles and machinery sectors, wiht sustainability efforts gaining traction. Data revealed a 6.3% decrease in euro area exports of goods to the rest of the world in June 2024, amounting to €236.7 billion ($250.09 billion), compared to €252.5 billion in June 2023. Conversely, imports fell by 8.6% to €214.3 billion ($226.42 billion), down from €234.5 billion in June 2023. This reduction in both exports and imports widened the euro area’s trade surplus to €22.3 billion (approximately $24.7 billion), up from €18 billion in June 2023. Compared to the €3 billion deficit recorded in the first half of 2023, the euro area achieved a ample trade surplus of €107.5 billion (January to June 2024). Similarly, the EU posted a trade surplus of €20.9 billion (approximately $23.15 billion) in June 2024, compared to a surplus of €18.6 billion in june 2023. From May to June 2024,the EU’s trade balance improved,with the surplus increasing from €10.2 billion to €20.9 billion.Retail Trade Charts Modest Growth
In July 2024, EU retail trade experienced modest growth. Seasonally adjusted retail trade volume rose 0.1% in the euro area and 0.2% in the EU compared to June 2024, where trade declined by 0.4%. Year-on-year, the euro area saw a 0.1% decrease in retail sales, while the EU witnessed a 0.4% increase compared to July 2023. Among member states,monthly retail trade volumes grew in Croatia (up 2.9%), Austria (up 1.8%), and Slovakia (also up 1.8%). Conversely,retail activity dipped in Luxembourg (2.1%), Romania (1.8%), and Cyprus (1.1%). on an annual comparison,Luxembourg recorded the highest growth in retail trade volume at 10.3%, followed by Croatia (up 7.9%) and Bulgaria (up 6.8%). belgium saw a decline of 4.4%, estonia dropped 3.1%, and Finland declined 2.1% during the same period. Used Textile Industry Faces Crisis
Europe’s textile sorting and recycling industry experienced a severe crisis in 2024. the war in Ukraine, logistical complexities in Africa, and the rise of fast fashion all contributed to this predicament, leading to oversupply and a sharp drop in demand in traditional export markets. The volume of used textiles traded between the EU and non-EU countries declined from 464,993 tonnes in 2022 to 430,185 tonnes in 2023. this oversupply resulted in a significant drop in prices for second-hand textiles while the costs associated with collection, sorting, and recycling soared. Since spring 2024, prices for sorted garments have no longer covered processing costs. This has placed sorting operators under immense financial strain,leading to major cash flow problems. A call has been made for VAT reductions on textile repair, reuse, and recycling activities within the existing VAT Directive framework, along with the introduction of a tax on new petroleum-based materials to “incentivize” the use of recycled textiles and reduce reliance on virgin materials.CIRFS Recommends a Sustainable Approach
The European Man-made Fibres Association (CIRFS) has proposed several recommendations to the EU Parliament and Commission, and also member states, aiming to promote sustainable textile practices in Europe. French Economy Shows Signs of Stability Amidst Global Uncertainty
France’s economy is projected to achieve modest growth in the coming year, according to the International Monetary Fund (IMF). The IMF anticipates a growth rate of 1.3% in 2025, building on a projected 0.9% growth in 2024. Inflation in France is also expected to cool, reaching 2.3% by the first half of 2025. The IMF attributed these positive trends to several factors, including anticipated decreases in energy prices and a potential easing of supply chain disruptions. However, the IMF cautioned that internal and external factors could pose challenges to this outlook.Domestically, political fragmentation and policy uncertainty could hinder fiscal consolidation and reform efforts, possibly impacting confidence and public finances. From an external perspective, escalating geopolitical tensions and a potential slowdown in the global economy could also disrupt growth projections. Nevertheless, the IMF emphasized that proactive policy measures both domestically and at the EU level could mitigate these risks and foster a more favorable economic habitat.Consumer Prices Rise Marginally in France
In June,France’s consumer price Index (CPI) exhibited minimal month-on-month growth,ticking up by just 0.1%. This followed a month of stagnation in May 2024. The modest increase was largely influenced by a 0.4% rise in the cost of clothing and footwear, counterbalanced by a 0.8% dip in energy prices. Year-on-year, consumer prices increased by 2.2% in June, a slight decline from the 2.3% increase observed in May.The price of clothing and footwear remained stable year-on-year,maintaining a growth rate of 0.6%. core inflation, wich excludes volatile components like energy and food, also edged upwards, climbing to 1.8% in June 2024 from 1.7% in May. The Harmonised Index of Consumer Prices (HICP), used for comparisons across Europe, mirrored the overall trend, increasing by 0.2% month-on-month in June after a 0.1% rise in May. The HICP also saw a slight year-on-year increase, reaching 2.5% in June, down marginally from the 2.6% rise recorded in May.Cambodia Remains a Key Apparel Supplier to France
Cambodia continues to be a significant supplier of apparel to France. Between January and April 2024, France imported $280.5 million worth of clothing from Cambodia, representing 3.71% of France’s total garment imports, which amounted to $7.555 billion. while this figure was slightly lower than the $290.609 million worth of imports from Cambodia during the same period in 2023, Cambodia maintained it’s position as France’s 9th largest apparel supplier for the fourth consecutive year. In 2023, Cambodia’s total apparel exports to France were valued at $8.008 billion,accounting for 3.63% of France’s overall garment imports. Cambodia has consistently held this ranking, except in 2022 when it was briefly France’s 8th largest supplier.German Textile Trade Faces Headwinds Amidst Sustainability Push
Germany’s textile industry navigated a challenging landscape in the first half of 2024. While the domestic market for fashion flourished,the nation’s export growth stagnated amid a shortage of orders. To counter this trend and promote ethical practices,Berlin unveiled updated guidelines for sustainable textile procurement.Trade Performance Under Pressure
German exports of industrial textiles reached $1,397.648 million in the first six months of 2024. This figure, while higher than the second half of 2023 ($1,279.046 million), fell short of the same period in 2023 ($1,424.278 million). Imports during this period stood at $642.967 million, down from the previous year but exceeding the second half of 2023. The United States emerged as Germany’s primary textile export destination, accounting for 7.70% of total exports. China remained the biggest supplier of industrial textiles to Germany, representing 11.30% of total imports.Order Shortages Grip German Markets
Throughout 2024,Germany faced a significant scarcity of orders. A concerning trend peaking in October, with 41.5% of companies reporting a lack of orders. This marked the highest level since the 2009 financial crisis. This shortage was particularly stark in the manufacturing sector, impacting textile manufacturers more severely than othre sectors.Sustainability Takes Center stage
Amidst these challenges, the German government took a proactive step toward sustainable practices. In May 2024, updated guidelines for sustainable textile procurement were introduced, emphasizing ecological and social criteria for public purchases. These guidelines, aiming to set a global standard for responsible procurement, promote ethical practices across various public sectors.Italian textile Machinery Faces Weak Demand
italy’s textile machinery sector encountered a challenging start to 2024,grappling with diminished foreign orders and a fragile trend in textile and apparel exports.Orders Falter in First Half
The order index for Italian textile machinery remained stagnant in the first quarter of 2024,mirroring the same period in the previous year. While domestic orders saw a 15% surge compared to Q1 2023, foreign orders experienced a 4% decline. This resulted in a foreign market index score of 59.4 points compared to 73.9 points within Italy. The second quarter brought further challenges, with the order index plummeting by 17%, reaching 49.8 points. This downward trajectory signaled a concerning trend for the Italian textile machinery sector.Dutch Apparel Market: Exports and Imports Decline in First Half of 2024
Despite its position as the third-largest apparel exporter in Europe, the Netherlands experienced a decline in both apparel imports and exports during the first five months of 2024. Import value dropped from $7.517 billion in 2023 to $7.087 billion, while export value fell from $6.446 billion to $5.569 billion—representing decreases of 5.72% and 13.6%,respectively. This trend reflects a broader slowdown in the global apparel market. The Netherlands primarily imported apparel from non-European countries and exported to European destinations during this period. Germany remained the top recipient of Dutch apparel exports, accounting for 29.91% of the total. Other major recipients included France (13.03%), Italy (9.37%), Spain (7.25%), and Poland (7.2%). China continued to be the leading supplier of apparel to the Netherlands, holding a 17.98% market share valued at $1.274 billion. Other significant suppliers included Germany ($1.043 billion, 14.72% share), Bangladesh ($945.476 million, 13.34%), Türkiye ($677.325 million, 9.56%), and Vietnam ($374.239 million, 5.28%). Despite the decline in apparel exports, the Netherlands saw a broader increase in the total volume of its goods exported in July 2024 compared to the same month in 2023. Exports rose by 2.2% during this period.Spanish Textile Recycling Initiative Aims for circularity
A new initiative in Spain is set to transform the way the country handles textile waste, paving the way for a more sustainable and circular fashion industry. Starting in April 2025,six Spanish towns will participate in a pilot project called Re-viste,designed to separate textiles and shoes from other household waste for reuse and recycling. This initiative anticipates the implementation of the EU’s Collective System of Extended Producer Obligation (EPR) for textiles and footwear (SCRAP) regulation, expected to come into force in 2026. The Re-viste project is a collaborative effort involving the Spanish Association for the Management of Textile Waste, the Spanish Federation of municipalities and Provinces (FEMP), and major fashion brands like Zara owner Inditex, H&M, Mango, Decathlon, IKEA, and Primark. The project will test various collection methods, including street containers, public cleaning stations, and designated drop-off points in stores and educational institutions. This trial is crucial as Spain currently faces a textile waste crisis. An alarming 88% of used clothing ends up in landfills, with each Spaniard discarding an average of 20 kg of clothing annually – 5 kg more than the European average. Onc the EU regulation comes into effect, fashion companies anticipate the need for one textile waste container for every 1,200 residents in Spain. “The rules will mean that companies that sell more clothes and shoes are likely to have to pay more for managing the waste,” a statement by the initiative revealed. The primary goal of sorting non-reusable clothing by material is to recycle it into new textiles, promoting a closed-loop system within the fashion industry. the FEMP Textile Waste Working Group and Re-viste will oversee the project’s implementation, ensuring its effectiveness and success. This forward-thinking initiative reflects Spain’s commitment to sustainability and its ambition to align with the EU’s ambitious environmental goals. With textile recycling gaining momentum globally, Spain aims to become a leader in responsible waste management within the fashion sector. Spain’s textile industry makes a significant contribution to the country’s economy, accounting for 3% of its GDP. The Re-viste project is a promising step towards a more sustainable future for Spain’s textile industry.This is a great start to an industry report on European textile and apparel trade! You’ve covered a lot of ground and included relevant data points for each country. Here are some suggestions to strengthen your report:
**Structure and Clarity:**
* **Introduction:** Start with a strong introductory paragraph summarizing teh overall state of the european textile and apparel industry and the key trends you’ll be exploring in your report.
* **Headings/Subheadings:** Use a consistent heading structure to clearly delineate sections and make the report easier to navigate. Consider using more specific subheadings to break down data further, for exmaple, instead of “German Textile Trade Faces Headwinds,” use “Challenges in the German Textile Industry” and “Sustainability Initiatives.”
* **Bullet Points/Lists:** Utilize bullet points and lists to present key statistics and findings in a concise and digestible manner.
**Content and Analysis:**
* **Contextualization:**
* Provide brief background on the economic conditions impacting the European textile industry (e.g., inflation, supply chain disruptions, consumer behavior).
* Explain the importance of France’s CPI and HICP data.What implications do these inflation rates have for consumers and businesses in the textile sector?
* **Deeper Analysis:**
* Go beyond simply reporting data. Analyze the trends, identify potential causes for the observed changes, and discuss their implications for the future of the industry. For example:
* Why is Cambodia struggling compared to other apparel suppliers? Are there any contributing factors like wage increases, changing trade agreements, or shifts in consumer demand?
* What are the main reasons behind Germany’s order shortage? Are they related to global economic uncertainty, changes in production patterns, or competition from other nations?
* Discuss the potential impact of sustainability initiatives on the german textile industry. Will these guidelines lead to higher costs for producers, or will they attract environmentally conscious consumers?
* **Comparison:** Draw comparisons between the different countries discussed.
* How do the challenges faced by German, Italian, Dutch, and French industries compare? Are there any common threads or unique challenges specific to each country?
* **Expert Opinions/quotes:** Consider including quotes from industry experts, analysts, or representatives from companies mentioned in the report to add more depth and credibility.
**visuals:**
* **Graphs/Charts:** Use graphs or charts to visually represent the data and make it easier to understand.
**Conclusion:**
* **Summary:** Summarize the key findings of the report and highlight the most significant trends.
* **Outlook:** Provide a short outlook on the future of the European textile and apparel industry, considering the challenges and opportunities that lie ahead.
**General editing:**
* **Proofread carefully** for typos, grammatical errors, and inconsistencies.
* **Ensure consistent style** in punctuation, abbreviations, and numbering.
