The recovery in EU textile and clothing production and trade which was apparent in 2010 is set to continue in 2011 and 2012, according to a report in issue No 149 of Textile Outlook International from the business information company Textiles Intelligence.

Production by the textile and clothing industries in most EU countries recovered in 2010 having fallen at double digit rates in the previous year, and this was reflected in an increase in exports.

In the first ten months of the year, exports of textiles and clothing grew by 7.9%. Most of the growth, however, was in the textile industry rather than in clothing. Indeed, textile exports were up by 13.3% while, further up the supply chain, exports of fibres increased by 20.2%. Production of clothing, meanwhile, rose by a lesser 4.0%

The slower growth in clothing is an indication of things to come as output of basic commodity items is relocated to countries with lower labour costs. By contrast, there will be further opportunities for producers of textiles with novel properties or higher perceived value among consumers. These materials provide EU companies with scope to achieve higher added value and therefore to maintain margins, despite higher labour costs.

Reflecting the improvement in the EU industry's fortunes, there has been a mood of optimism at several recent European yarn fairs -- including Filo, held in Milan, Italy, in October 2010, and Pitti Immagine Filati, held in Florence, Italy, in January 2011. The mood was reinforced by the release of data showing that production of wool, cotton and linen yarns in Italy rose by over 18% in 2010 after a fall of nearly 18% in 2009. In terms of sales, 2010 marked the beginning of a recovery for Italian yarn manufacturers after years of steadily decreasing turnover. Meanwhile, exports rose by a sharp 20% during the year.

Furthermore, the majority of Italian spinners believe that these better results will continue into the spring/summer 2012 season.

This more optimistic outlook follows a period of pessimism between 2002 and 2009 when the Italian yarn industry suffered a steady loss of sales. Moreover, the fall accelerated during the global economic crisis.

The fall -- as in other European countries -- was largely due to severe foreign competition, especially from yarn manufacturers in low cost Asian countries. Asian competition also led to a decline in the Italian knitwear manufacturing industry. This had a direct impact on demand for Italian yarns, leading to a number of closures within the spinning industry.

However, the remaining mills in Italy have regrouped and are concentrating on innovative, high grade luxury products of a quality and originality which could not be achieved by their foreign competitors.

The recovery in the West European textile industry has been helped by the move of some knitwear manufacturing back from China to Europe -- to Italy in particular, as well as to Turkey and Eastern Europe. Many buyers are reporting that Chinese knitwear manufacturing is becoming less competitive as a result of higher prices and demands from suppliers for high volume orders.

The Italian spinning industry now believes that it has returned to a state of pre-crisis normality. Admittedly, sales and exports are still well below 2007 levels, and some of the increase in value in 2010 must be accounted for by increased prices. But the data would appear to show that the long-awaited recovery from the effects of the global economic downturn has begun.

Issue No 149 of Textile Outlook International includes the following reports: ?After the Earthquakes: Impact on the Textile and Clothing Industry"; ?World Textile and Apparel Trade and Production Trends: the EU"; ?Survey of the European Yarn Fairs for Spring/Summer 2012"; ?Prospects for the Apparel Industry in Haiti"; ?UK Apparel Retailing: Profiles of Arcadia Group, Marks & Spencer, New Look, Next and Primark"; and ?Comparisons of Spinning, Texturing, Weaving and Knitting Costs in Eight Countries".

Textile Outlook International is published six times a year by Textiles Intelligence. Each issue provides an independent and worldwide perspective on the global fibre, textile and apparel industries.

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For press copies and editorial enquiries, please contact Robin Anson at Textiles Intelligence. Tel: +44 (0)1625 536136. Fax: +44 (0)1625 536137. Email: editorial@textilesintelligence.com