Business confidence past peak - Cost increases undermine competitiveness
Business confidence in the textile industry had recovered to pre-corona crisis levels by the end of 2020. By mid-2021, business confidence rose even further above zero, with more business leaders optimistic rather than pessimistic about the expected development of economic activity. This level had not been seen in the previous five years.
However, since the summer of 2021, confidence among textile entrepreneurs has taken a knock, but all in all has remained at a decent level compared to the nadir of the corona crisis. But sharp rises in costs threaten competitiveness.
Textile activity recovered after the corona crisis
Textile turnover grew by 14.8% in 2021 compared to 2020, to €4.6 billion. As output prices rose by an average of 3.6%, production in volume terms grew by 10.8%. However, given that textile sales fell 7.9% in 2020 as a result of the corona crisis, sales in 2021 were only 5.7% higher than before the pandemic. In the fourth quarter of 2021, sales suffered from supply problems, cost increases and the end of the trend of renovating interiors.
All product groups except knitted goods achieved turnover growth in 2021 compared to 2020. Turnovers of most product groups also came out higher than pre-corona levels, although a few product groups in 2021 were still unable to make up, or only just barely, the loss in turnover suffered in the corona year 2020: knitted goods (-5.2% in 2021 compared to 2019), finishing (-8.5%) and carpets (+0.2%).
Evolution of turnover per product group
|In million euros||2020||2021*||21/20*|
|Yarns (incl. preparation)||277,6||359,5||29,5 %|
|Textile finishing||143,3||150,1||4,7 %|
|Synthetic and artificial fibres and filament yarns||407,5||437,0||7,2 %|
|Knitted fabrics||58,3||56,1||-3,8 %|
|Technical textiles and others||1.471,1||1.740,0||18,3 %|
|TEXTILE INDUSTRY **||4.049,8||4.649,0||14,8 %|
Textile exports continue on pre-corona crisis momentum
Exports account for 75% of textile turnovers. In 2021, textile exports (including transit and excluding knitwear) grew by 7.5% compared to 2020. Imports (including transit and excluding knitwear) fell by 6.6%. Around 36% of total textile exports were accounted for by technical textiles, exports of which rose by 7.2%. Exports of interior textiles (export share 30.5%) rose by 13.7%.
Resurgence of deliveries to internal EU market in 2021
Around 67% of total textile exports are destined for the EU. Exports to the EU market rebounded by 7.3%. Exports to the three main export markets within the EU grew: France +3.1% (18.9% share of total Belgian textile exports), Germany +6.9% (13.9% share) and the Netherlands +6.5% (9.9% share).
All major non-EU export markets purchased more Belgian textiles, with the exception of the UK
Textile exports outside the EU grew by 8%. All regions except the United Kingdom (-0.5%) and Oceania (-2.2%) contributed to this rise. The main export market outside the EU is the United Kingdom with a 10.3% share of total Belgian textile exports, but our textile exports there declined slightly by 0.5% in 2021, on the heels of a previous 13.4% decline in 2020.
The fact that the UK is no longer part of the single market complicates exports. But all in all, exports to the UK still held up reasonably well. Western Europe outside the EU (excluding the UK) (3.5% share) purchased 9.0% more Belgian textiles. Eastern Europe (1.8% share) accounted for a limited rise of 2.8%.
The biggest gains in territory were made in exports to the US (3.4% share of total textile exports) +27.9% and to Canada (0.7% share) +82.0%. Exports to South America were up +23.4%, but barely account for 1.2%. The Middle and Far East grew by around 11% (7.8% share). Deliveries to the Chinese market (3.4% share) were up +2.2%.
Although textile imports from China fell by -48.1% here in 2021, this comes on the heels of a spectacular +130% rise in 2020. This brought Chinese imports to a more 'normal' level in 2021, following the explosion of imports in 2020 primarily due to medical textiles (including mouth masks). China nevertheless remains the leading textile supplier with a share of 13.3% (not including clothing).
Capacity utilisation and investment slightly higher
The capacity utilisation rate increased to an average of 71.7% in 2021, from 68.8% in 2020. Nevertheless, the utilisation rate remained below pre-corona levels (73.6% in 2019). Textile investments grew 13.6% to €165.7 million in 2021, following a 19.1% decline in the corona year 2020.
Slight fall in employment
In 2021, 18,400 people were employed in the textile industry. Besides the relatively high temporary unemployment, around 340 jobs were lost; down 1.8% from 2020.
War in Ukraine undermines recovery
In the space of just six months, from August 2021 to February 2022, companies went from 'heaven to hell'. While in the summer there was still considerable optimism about the continued economic recovery, this was completely quashed in the autumn of 2021 and the spring of 2022. The Russian invasion of Ukraine triggered an unprecedented explosion in EU energy prices, with renewed disruptions in supply lines of raw materials and equipment. On the demand side, Western consumers are keeping their wallets closed, given that too much purchasing power is draining away on overpriced energy bills. Even with a rapid end to the war, it will never be possible to fully make up the damage during the year.