The economic situation in Prato
Notes on the economy by the Study Office of the Industrial Association of Prato- Juanuary 2009
The negative spiral "decrease in demand- production- employment- worsening expectations- further decrease in demand" triggered by the bursting of the financial/mortgage bubble in the U.S. in August 2007 gradually grew in magnitude through 2008, keeping pace with the destruction of wealth that followed it, putting most of the banking and financial system in a crisis situation, with the restriction of credit that has contributed, until now, to render largely ineffectual a monetary policy of the central banks that has become more and more expansive (until, as in the U.S., the Fed decreed the zero interest rate).
The "real" crisis struck industry first of all, causing a drop in production that was one of the worst in the post-war period. The sectors most seriously damaged are those that produce investment goods, durable consumer goods (in particular those with a high unit value, such as automobiles) but also semidurable goods (like apparel) and intermediates (in the industrial chains, especially the long ones, the businesses downstream are waiting to see the level reached by demand, and the effects upstream are proportionately more intense).
All this explains why the textile sector has been so badly hit, and could not be otherwise. Effectively the drop in production and exports was severe already in 2008, as indicated by the Italian Fashion System data (-12.1% was the level of exports in the cotton-linen chain in January-September 2008 with respect to 2007, -10.0% for the woolen chain).
The Prato textile district
The effects of the crisis were strongly felt in all the textile districts, which suffered a severe drop in exports. In the period from January to September 2008 with respect to the same period in 2007, textile exports from Prato were down 10.7% in value, from Biella 6.2%, Como Ð3.3%, Bergamo Ð15.2%.
As regards foreign markets, sales of woven fabrics, knits and other types of fabrics in the first nine months of 2008 were negative on all markets, starting from the most "important" clients like Germany (-13.1%). Only exports to China (+6.7%) and Russia (+4.9%) fared better, but they account, together, for only 6.8% of the total export market for textiles in Prato.
With regard to forecasts of an upturn, 19.4% of the operators in the sample think it should begin toward the end of 2009, 58.3% in 2010; 22.2%, the most pessimistic, after 2010.
In view of this recovery of the world economy, while will have to come, sooner or later, the Prato district maintains its position as the main center of production of textiles and fashion in Italy, with inimitable products from the viewpoint of research, creativity and quality, with greater capacity than ever in terms of customized solutions, flexibility and service.
Many initiatives in support of the member companies.
Fashion Trends. Some of the top international fashion design consultants have presented their suggestions and impressions relative to the fashion trends, fabrics and colors, for the following season. On the basis of this information the companies in the district can develop their new fabric sample collections to correspond to the needs of innovation and quality required by the continually changing markets.
Legal Consultants. At the disposal of the member companies, a number of experts in foreign laws – with whom the Consortium has a long-standing agreement – provide consultant services with regard to legal, commercial and fiscal problems in countries like France, Germany, Spain and the U.S.
Internationalization. Intense promotional activity on foreign markets to grasp new opportunities and thereby increase the export business for the products of our district. In particular, the focus is on the more industrialized markets such as Europe and the U.S., while as regards emerging markets our attention is concentrated in particular on China.
On the occasion of these promotional initiative, besides textile products Pratotrade also promotes historical, cultural and turistic aspects of the Prato district.
International initiative:
USA
- — PV Preview I-Tex Style, New York.
Europe
- —Premiere Vision, Paris.
- —Munich Fabric Start, Munich.
Japan
- —JITAC Tokyo.
China
- —Itinerant Workshop: Beijing – Shanghai – Shenzhen.
