A view to textile and clothing in Italy

How has the textiles and clothing sector performed in the last six months?

The whole Italian textile sector has been in crisis since as long ago as 2001, due mainly to low price competition from the Far East. The outsourcing to other countries of low value yarn and highly labour intensive production with small margins has reduced the range of the industry, with Italian companies instead adopting a niche strategy of high value products: typically fashion related. Thanks to their unique skills, some industrial areas have been able to survive.

In the first half of 2010, the main players in the sector have shown some positive results, compared to the very negative figures of 2009, with sales up 3.4% and profits slightly higher year-on-year. However, between January and June 2010 small- and medium-sized manufacturers suffered from the steep fall in end-user consumption. Consumers are focused more on primary goods than textile products, and this has hit many fashion brands.

What is the current trend in payment delays and payment defaults?

The textile sector still has the highest level of overdue bank debts: 13% and, including footwear, 14%. Payment delays and defaults have increased steadily, and Crédito y Caución is expecting a continuing negative trend, although some districts will perform better than others.

What is Crédito y Caución´s short term outlook for the textile and clothing sector?

The feedback from the main Italian textile districts [Biella, Carpi, Como, Prato, Vicenza] is mixed. Any recovery will be very modest and slow in textiles and even more so in clothing. There are some positive signs coming from the Biella district; whereas Como, specializing in silk production, continues to face strong Asian competition. The Prato district has shown some export growth [10%].

On the whole, the forecasts for 2010 confirm a poor sector performance - production down 14% and turnover down 12% - with exports decreasing 9% and domestic orders declining 16%.