German Textile Machinery Orders Declining Rapidly

Thursday 23rd of October 2008 08:01:39 PM

German Textile Machinery Orders Declining Rapidly

The textile and clothing industry is taking a global hit due to the economic problems around the world. It has been widely reported the US and UK retail sales are down significantly. In addition, manufacturing production indicators are point to a continued slide towards recession. But the impact of the financial meltdown is impacting all countries.

This is very apparent when you consider the German textile machinery industry has seen a 51% decline in orders by other countries in just the last 10 months. The German textile machinery industry sells a significant number of spinning machines and the drop in orders is having a quick and negative impact on employment.

The textile machinery industry downturn in orders is not surprising when you consider all clothing and textile sales have been consistently dropping for several months now. Everything from the most expensive fashion to cheap t-shirts are experiencing downward sales trends as consumers hunker down financially to survive the developing recession.

The head of the VDMA Textile Machinery Association, Mr. Fritz Mayer, recently commented, "Business with textile machinery always has undergone cyclical fluctuations, but what happens actually is the strongest slump since World War II." The German textile machinery industry is the biggest exporter segment within the engineering sector and 2007 was a stellar year in terms of sales levels.

Unfortunately the reduction in orders is not expected to reverse anytime soon. The textile orders that come in from around the world have often been government subsidized. Right now most government subsidies are being redirected into the financial markets to prop up the banking systems.

The first six months of 2008 compared to the first six months of 2007 saw a 12% decline in exports. This number is expected to be much higher in the last six months of the year, because orders made in 2007 accounted for much of the early 2008 exports.

(c ) Image by Inderpal Phillon, www.sxc.hu/