Fashion Economic Trends
Camera Nazionale della Moda Italiana
The Italian Fashion Industry: Key Figures
T he recovery has started again
in the second quarter after the
serious uncertainties in the first
I
months of 2010.
n July, the ISAE, the Institute
for the studies of economic
cycles in Italy has included the
fashion industry, along with two
other pillars of the Made in Italy,
the mechanical engineering and
furniture, among the first sectors
T
"in expansion".
he focus of companies is now
on 2011, but uncertainties
remain about consumption trends
at the end of the year. Households
consumption in the last quarter of
the year will strongly influence
both the final 2010 budget for the
growing number of Fast Fashion
companies and the attitudes of the
fashion buyers at the beginning of
T
next year.
he poor performance in the
first quarter, influenced by
concerns raised by the Greek crisis
has led us to a very conservative
september 2010
(textiles, clothing, leather, leathergoods, footwear))
forecast in the previous release of
FET that included a worst-case
scenario of a freeze in the
recovery. Following the much
beetter figures of the second
quarter and the positive trend,
although not generalized,in
exports, we can now discard the
worst-case scenario and confirm Page 2
the forecast made before the Greek A lively upward trend in turnover
crisis: sales growth will average and production recorded in the
around 6.5% compared to 2009, second quarter.
still far below the levels of 2007-
T
2008 however. Page 3
Consumer confidence is worsening
he opening of 2011 will be again in Italy while keeps on
driven by the lively trend of improving in the rest of Europe and
in the US.
B
the second half of 2010. Positive score for exports, but
y mid-2011,however, the clothing is still progressing in slow
speed of recovery will slow motion.
down, especially if the policies of Page 4
budgetary austerity announced by Forecast
several European governments
will find effective and
comprehensive implementation.
 A snapshot of the fashion industry in the first half of 2010
SECOND QUARTER: THE RECOVERY

A
HAS COME.

fter eight negative quarters, and

a very disappointing first
quarter, in the second quarter of 2010
the turnover of the fashion industry is
finally growing with a significant
rebound of +14.6% over the same
quarter of 2009, which had
represented the floor of the economic
cycle. The growth has spread both in
the upstream and downstream
sectors. The clothing and footwear
sectors have eventually, lined up with
the leather goods industry that was
already groving in the first quarter.
The average between the negative
first quarter and a positive second
reaches +4.4%, with the final month
of the semester showing further

P
progression
roduction, in volume,already
growing in the first quarter
accelerated in the second, in both
upstream (+14.5%) and downstream
(+8.9%) sectors. Overall, the
production in the first half of 2010
was 7.4% higher than the same
period in 2009 for the fashion
industry as a whole.
FASHION IS AMONG THE
FORERUNNERS IN THE SUMMER

A
RECOVERY

t the end of July, ISAE has

analyzed the position in the
economic cycle of the sectors in
theItalian industry, assessing which
were still in recession, stable or
growing. Only 5 sectors showed an
expansive trend: fashion, the oil
processing industry, consumer
electronics and computers,
machinery (excluding automotive)
and the group of "other industries"
whose main component is the
furniture industry.

september 2010 p2
 Domestic consumption and external trade

C
CONSUMERS CONFIDENCE GOES DOWN IN ITALY, BUT KEEPS ON IMPROVING IN THE REST OF EUROPE
onsumer spending is still far from the level before the financial crisis. Latest indicators delivered by
Confcommercio show in July, an overall flat trend, while spending on clothing was slightly up in
June (+1.8% at current prices) and July (+1.2%), but still weak. The weakness in consumption is
confirmed by the Italian consumer confidence indicators, which, after recovering in 2009 to values
higher than the 2008 average, switched to a negative momentum. In August, a further decline in
confidence indicators has led to the lowest level since March 2009. The assessments of personal
economic situation is worsening even if there is some improvement in the opinions about the general

T
economic situation. Expectations about the future are still pessimistic.
he Italian figures contrasts with the European average, which shows a continuous improvement of
the confidence among consumers, confirmed in the August survey. In the US the Consumer
Confidence Index was stable in August after a growth in previous months.
FOREIGN TRADE: EXPORTS ARE TAKING­OFF, BUT APPAREL IS STILL MOVING IN SLOW MOTION AND SOME

T
KEY MARKETS ARE STILL NEGATIVE.

he first half data provide a very positive score for the textile industry (+11.3%), leather goods and
footwear (+12.1%), while the picture remains unclear in clothing with two major markets (France
and Germany) that grew only moderately, and other important countries (Switzerland, Russia, Japan)
still negative. Overall, exports of the fashion industry grew by 5.5%, with good results in the U.S.

I
(+12.9%) and China (Hong Kong +34.9%).
mports (+7.4%) grew slightly more than exports. The trade balance is, however, improved by almost
100mln euros compared to 6 months of 2009, mainly due to the positive contribution of the leather
industry.

september 2010 p3
 Forecast
T he leading indicators calculated by the OECD
show that the long period of recovery after the
financial crisis will come to an end in the coming
months throughout the OECD area. Indeed, the
latest figures (July) anticipate a weakening of the
macroeconomic environment,particularly in
Canada, France, Italy and the United Kingdom but
also in China and India. Signs of a coming
T
slowdown, also emerge for the U.S. and Japan.
hese
indicators
tend to anticipate
the movements of
the economy by
about six months
and those of the
fashion industry
by 8-10 months.
Should these
early signs be
confirmed we can
expect the slow
down to show up
between January
T
and February 2011.
he end of 2010 wil then be the climax of the
recovery which will gradually weaken during
the first half of 2011. The September outlooks
published by the OECD and the European
Commission underline in particular the continuing
downside pressure on consumers behavior
following the need to adjust for the income cuts
incurred during the recession and the concerns
T
about further increases in unemployment.
he size and geography of the slowdown will
depend, as already reported in the last edition
of the FET, on the more or less restrictive fiscal
policies that will prevail in European
governments, especially in Germany, and in the
U.S.
Data processing and analysis by Marco Ricchetti
OUTLOOK FOR THE ITALIAN FASHION INDUSTRY IN
A
2010­2011
rchived the free-fall in production and sales
in the 2009 and the bad start of 2010, the
positive results of the second quarter, a strong rise
in May and June and the good performance of
exports allow us today to say that the risk of a
freeze in the recovery, feared in the previous
edition of the FET, can be excluded. The
informantion now
available leads us
to confirm the
pre-Greek crisis
forecasts: the
turnover for the
Italian fashion
industry is
expected to grow
around 6.5% in
2010, while
remaining much
below the levels
T
of 2007-2008.
he year 2011
will be
strongly influenced by two factors: firstly, the
timing and size of the macroeconomic slowdown,
heavily dependent on government policies in a
context of consumer demand still very uncertain
and secondly the developments in the Euro-dollar
exchange rate. As far as the latter is concerned, the
dollar is expected to keep weakening at least until
I
mid-2011, but with a moderate momentum.
n this framework, and assuming no further
external shocks, growth in turnover for the
fashion industry will continue in the first half of
2011 at a sustained rate close to 10%, particularly
in the first quarter, more consistent in the
downstream sectors than in upstream's. A
noticeable slowdown is expected in the second
half.