GENEVA — Combined textile and apparel production in Germany, Europe’s largest economy, rose in 2010 for the first time since reunification in 1990, led by a double-digit surge in textiles and a much smaller increase by apparel, and is expected to expand again by 2 percent this year, said a study by Deutsche Bank Research.
Output of the textile and apparel industry in Germany fell nearly 70 percent from 1991 to 2010, with the 85 percent decline in apparel much worse than in the more capital-intensive textiles sector, which contracted 50 percent, the research found. The shift of production to lower-cost destinations abroad also witnessed huge falls in the number of factories and workers in the sector, declining almost 75 percent between 1995 and 2010, estimates the DBR report.
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In the face of increasing input costs, from raw material and wages to energy, and stiff competition from lower-cost foreign suppliers, apparel production in Germany could fall further, the study anticipates. At present, less than 5 percent of apparel sold in Germany comes from domestic factories.
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“Products still made in Germany are mainly high quality, or small production runs,” the report said.
“Superior functions (research and development, design, marketing) are still being based in Germany.”
The best prospects to cushion the apparel sector from these challenges, DBR concluded, is by focusing on special product qualities and innovative niches such as the application of technical textiles to the apparel industry. The range of possibilities includes areas such as apparel with integrated electronic components to deliver warmth to the body, for the use of electronic gadgets such as MP3 players or mobile phones, or to monitor bodily functions by incorporating sensors in the apparel.
German manufacturers also stand to gain, it suggested, from the “enormous unsatisfied demand” in the emerging economies of Asia and Latin America, where German and European brands are popular. But the report admitted that inadequate protection of intellectual property, especially in Asia through copies of original creations of fashion apparel and luxury brands, is a problem for German exporters.