Germany’s garment industrys

Germany’s garment industrys

Germany’s garment industry, a significant pillar of the nation’s economy, is navigating a complex landscape shaped by economic pressures, sustainability imperatives, and digital transformation.

Economic Significance and Structure

In 2023, Germany’s fashion industry contributed approximately €70 billion to the GDP, with a direct gross value added of €29 billion. The sector supported around one million jobs, including 620,000 within the industry itself. Germany stands as the world’s third-largest exporter of fashion and textiles by value, following China and India, and is the fourth-largest importer, sourcing primarily from China, Bangladesh, and Turkey .

The industry encompasses over 1,400 enterprises employing approximately 124,000 individuals. Technical textiles, utilized in sectors like automotive and aerospace, are the primary growth drivers, generating around €13 billion annually. Fashion and clothing textiles contribute about €12 billion, while footwear, leather goods, and home textiles each account for approximately €3 billion .

Challenges and Pressures

The industry faces several challenges:

Order Shortages: As of early 2024, 41.1% of textile manufacturers and 36.9% of apparel firms reported a lack of orders, reflecting a broader downturn in the manufacturing sector .

High Production Costs: Increased energy prices, raw material costs, and logistics expenses have strained profitability, leading some companies to consider relocating production abroad .

Labor Shortages: A significant portion of the industry reports difficulties in finding skilled workers, exacerbated by the retirement of the baby boomer generation and insufficient training programs to attract younger talent .

Retail Challenges: The insolvency of major retailers like Galeria Karstadt Kaufhof and Signa Group has weakened city-center retail presence, contributing to a decline in physical retail locations .

Sustainability and Innovation

Sustainability is increasingly central to the industry’s evolution:

Consumer Behavior: A significant portion of consumers, especially Gen Z, are purchasing secondhand clothing, driven by environmental concerns and cost savings.

Government Initiatives: The German government aims to source at least 50% of public textiles according to sustainable procurement guidelines by 2026 .

Circular Economy: The textile recycling market in Germany is projected to grow at a CAGR of 3.2% from 2025 to 2030, reaching approximately $453.9 million by 2030 .

Digital Transformation

Digitalization is reshaping the industry:

Technological Adoption: Companies are integrating AI, 3D design, and digital product passports to enhance transparency and efficiency.

Omnichannel Strategies: Brands are adopting omnichannel approaches to rebuild retail experiences and meet evolving consumer expectations .

Outlook

While the German garment industry faces significant challenges, its commitment to sustainability, innovation, and digital transformation positions it to adapt and thrive in a changing global landscape.