How can domestic textile manufacturers pull themselves out of the crisis?

To overcome the crisis in the textile and clothing industry, the most helpful measures would be the mutual connection of companies, better marketing presentation, expansion of the trade network, continuation of incentives for this sector, lower contributions and taxes from wages, and a properly conducted monetary policy.

This was shown by a survey conducted in January this year by the Association of Textile and Clothing Industry at the Croatian Chamber of Economy (HGK). Out of a total of 83 surveyed economic entities, 42.2 percent of companies responded to the survey. The results of the survey showed that in January this year, 20.1 percent of companies in the clothing industry and 28.6 percent in the primary textile industry recorded a decline in sales in the domestic market. The decline in sales in the clothing industry ranged from 11 to 25 percent, while companies in the primary textile industry recorded a sales decline of 10 to 30 percent.

The survey showed that 11.4 percent of companies in the clothing industry achieved a sales increase of more than 10 percent, while 17.1 percent of respondents maintained the same level of sales. In the foreign market, however, 17.1 percent of companies in the clothing industry recorded a sales decline of 5 to 60 percent, 2.9 percent recorded a 10 percent sales increase, while 25.7 percent had stable sales. The survey indicated that 11.4 percent of companies in the clothing industry expect their total revenues to increase by 10 to 25 percent this year. Twenty percent expect a revenue decline of 10 to 30 percent, while 17.1 percent estimate that their revenues will be stable, i.e., at the same level.

In the period from the end of December 2007 to the end of December 2008, according to the responses of companies that participated in the survey, 285 workers lost their jobs, of which 76 were in the textile industry and 209 in the clothing industry. The most frequently cited reasons for the reduction in the number of workers were natural attrition (retirement), the introduction of new technology, the worker did not meet expectations, or departures at the request of the workers themselves.

In the same period, the number of newly employed workers was 243, of which 210 were in the primary textile industry and the remaining 33 in the clothing industry. When asked how they assess the current competitiveness of the company in the market, those who primarily work on contract jobs indicated a deterioration in competitiveness, as labor costs in neighboring countries are significantly lower. In verbal discussions with some companies (which produce men’s suits and winter programs and special clothing, as the quantities ordered in public procurement are significantly decreasing), it was stated that there would be problems in filling production capacities in March 2009.

For those companies that have their own product, it can be said that they are competitive (but they have achieved this exclusively through their own efforts), although they are aware that they need to work on stronger promotion of their own brand and presentation through public media, especially in the domestic market, where they cannot even reach good sales positions in larger cities, according to HGK. Cooperation with banks was rated as usual by 71.4 percent of companies, 22.9 percent say they have difficulties in that cooperation, and 5.7 percent say that banks threaten them.  (H)