Decline in fortunes of the textile and clothing industry

15 Aug '08

2 min read

Sales in the Czech textile and clothing industry fell by nearly 14 percent compared to last year to touch Kc22 billion in the first half of 2008. This was largely because of appreciation in national currency which was rapidly eroding the profit margin of the exporters and manufacturers alike.

Separately, sales of clothing, dropped by around 20 percent to Kc3.7 billion while those of textile plummeted by around 13 percent to Kc21.7 billion.

Besides, energy prices have soared so high and have impacted the industry to such an extent that even a relatively high number of orders cannot raise the profitability of any company.

Additionally, staff numbers in the textile and clothing companies employing 20 or more people also fell by about 8 percent to 52,500. In fact, between mid 2007 to mid 2008, textile companies in Czech Republic laid off 3,000 people which accounts for about 6.6 percent of the total workforce in the segment.

Falling sales and a decline in labor productivity in the first half of this year compared to the corresponding period last year has also badly affected the profits of textile enterprises. While productivity has dropped by about 2 percent in the textile industry, it has dipped by nearly 6 percent for clothing sector.

If the problems persist, it will be hard times for the textile and garment sector of the Republic, which contributes immensely to the revenues of the country.