The textile industry after the crisis On 26/02/2009, the old friend and colleague Mr. Berd Haase, forwarded to us an e-mail of Mr. Christian Fleming with title “A look at China in Numbers”, which gives a picture in numbers of the effect of the International economic crisis in China.

Today while three months have passed already, it is obvious that the banks, who are responsible for this crisis, will present (most of them) satisfying profits at the end of the year. While on the other hand, the industrial companies are called to face the reduction of the consumption and the lack of cash flow -which occurs also due to the reluctance of the banks to finance. And all this while being unable to cover their operation expenses which are still adjusted to the previous conditions of the market and they are now forced to reduce them.

This means reduction of the working staff which will induce a further decrease of the buying request.

In this article we would like to express our opinion about which will be the new balance of the International market in the textile industry once the crisis has gone, which we do not foresee that will happen soon.

First of all, the request of the textile products in the developed world will remain low, so the new situation will refer to the new distribution of a smaller market.

While the textiles is not a standard industrial product, and the fashion and season affect its request, the beginning of the crisis has forced the customers to cover more of their needs from the local production because China and the developing countries requested bigger quantities and longer time of delivery that gives more risk.

But while the crisis is prolonged, this picture changes. From the one side the producing units in the developing countries are adjusted in the new conditions, and they accept smaller orders and provide sooner deliveries.

On the other side in the West, the textiles' production units are studying the percentage of their staff that they will have to decrease in order to survive the crisis or even to close down their production units completely, in order to transfer them in the Eastern Europe or China.

Particularly Italy, who is the only west country who continues to have remarkable textile industry, will begin to have the results of the deindustrialization which was observed in the past in countries like England, France and Belgium.

With the principals of the free market economy, the production of the West will continue being transferred to the developing countries and this tendency will stop only when the salaries on the developing world will become equal with the salaries of the already developed world.

Best regards - knittingelements.eu