FIRST QUALITATIVE COMPETITIVENESS BENCHMARK

BY EURATEX SHORT SUMMARY

Labour costs
Unsurprisingly for both 2005 and 2006, the gap between real labour costs growth and productivity growth remained unchanged meaning that growth in productivity cannot reduce the divergence with the growth in real labour costs. Moreover few members indicate faster growth in real labour costs that endanger their overall competitiveness. This seems also be the case of the ongoing negotiations with trade unions in certain countries.

Other costs pressures
The pressure from other costs on the textile and clothing industry competitiveness is effectively jeopardising the survival of the industry in the EU, but again the details show differences in the evaluation of such impact on the companies.

Skill mismatch
The answer is showing a growing concern from members on the increasing or expected to increase shortages of skilled workers in the sector. The details show interesting features.

Regulation burden
Interestingly the regulations developed in 2005 at European level are increasing the burden on companies to a point that it could/has potentially affect(ed) the competitiveness of the industry. This is also the case for the national legislations in certain member states when there is need for transposition of EU laws.
For 2006 this trend will continue and there is a growing fear that future EU and national regulatory decisions in certain areas will impact strongly and negatively the future competitiveness of the sector.

And what about the future?
In the next two years the top three positive areas for the future industry are the innovation, the overall EU economic growth and the internal market regulation together with the export possibilities. Those elements will be compensated by the negative impact of the euro appreciation, the international competition and the trade policy in general. But results are less clear than the above might suggest.

Unsurprisingly, over longer term the dominant and crucial elements influencing positively the industry would be again the overall EU economic growth, and the innovation/technology developments that will be compensated by the negative expectations linked with the environmental legislation, the energy costs and the WTO/trade issues.