Despite good sales, the German knitwear industry is entering the 1st quarter of 2019 with uncertainty. Companies are reporting a weakening of their business.

This is the result of the business climate survey conducted by the industry association Gesamtmasche in January.

“Despite consumer restraint and external economic turbulence, incoming orders are still developing satisfactorily. However, the earnings situation is not satisfactory in view of rising production costs. There are currently no positive signals from either the fashion retail trade or the automotive sector,” said President Martina Bandte, commenting on the economic assessment. On the other hand, she sees an upward trend in sales in the Far East, North America and parts of Eastern Europe. “The new free trade agreement with Japan is immensely important for us, both on the import and export side.

Companies expect capacity utilization to fall

The subdued expectations for the coming months have pushed the business climate index from 13.3 index points in October to 12.0 points. In the current quarter, almost one-fifth of companies expect capacity utilization to fall. Only five percent still expect this in autumn.

Nine out of ten companies were satisfied with their domestic sales. However, 30 percent of them reported falling earnings. In addition, 95 percent of the companies believe that the price situation will not improve in their most important sales areas. At the same time, raw material and personnel costs continue to rise.

 

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Image: iStock

//JP