TEXTILE INDUSTRIES EARLIEST SUFFERERS IN INDUSTRIAL DECLINES

Press, Volume XCI, Issue 27628, 7 April 1955, Page 10

TEXTILE INDUSTRIES EARLIEST SUFFERERS IN INDUSTRIAL DECLINES

[By

LYNCEUS,

of the "Economist”!

[From the Economist Intelligence Unity

London, March 29.—Whenever industrial difficulties make themselves felt in the world, one can usually and rightly assume that the textile industries will be among the first of the victims. To go back no further than three years, it was evident in the appreciable industrial decline of early 1952 that the textile industries were far and away the greatest sufferers. Today, again, it is from the textile industries of Lancashire, Belgium, France and Italy that almost the only audible cries of distress emerge. The reasons are not far to seek. Tho first and the most important of thenr all is that “there is too much of it. Textile industries have proliferated over the last 30 years, usually behind the shelter of tariff walls, with a speed that would have been impossible in the days of free trade, when one or two giants served the needs of the whole world. This spread T>f thei textile industry, often to countries highly unfitted to operate them economically, has been the child of protection ana oi the desire to diversify the economies of essentially primary producing countries. , , . , Whenever an under-developed country translates into deeds the universal desire to industrialise itself, it begins with the textile industry. The capital involved is • comparatively small; the industrial skill required to operate the machines is, for the most part, rudimentary and can be easily acquired; the climatic conditions, which were once thought essential to the production of good textiles, and particularly of cotton, can now be created artificially. If to all these reasons be added the fact that the raw material, whether it be cotton or wool, is often to "be found in the , v ® r y primary producing countries which desire to industrialise themselves, it is hardly surprising that the cotton textile industry should have made such giant strides in countries like India and Brazil.

Effect of Technical bevelopmente Another reason for the vulnerability of the. textile industry to the ups and downs of the trade cycle is the fact that it is an industry m which technical developments have been so marked in recent years. In the main, these developments have come with the invention and application of various synthetic fibres. Some measure of the enormous changes that have taken place in the structure of the world textile industry may be gauged from the fact that, whereas in 1953 the production of cotton goods in the world exceeded the 1938 level by 15 per cent, only, that of rayon goods had risen by 114 per cent. Over the same period the world exports of raw cotton had fallen by 21 per cent, while the international trade in, the main material that enters into rayon production, dissolving pulp, had risen 30 per cent, in volume. The juxtaposition of these figures brings out very clearly both the change in the composition of the textile industry over this period of 15 years and also the decline of export trade in relation to total production. Both in- the cotton and rayon textile industries production has moved much closer to the sources of the raw material and the older producing areas have felt the impact of this change in the geographical structure of the industry. Apart from these special factors in the structure and location of the industry, there is an even more fundamental and overall reason for the vulnerability of the textile industries of the world. It is the very basic fact that the world consumption of the three principal textile fibres, cotton, rayon and wool, has, over the last 15 years, lagged far behind that of other materials. Industrial output in 1953 was nearly twice the immediate pre-war volume. World textile production, however, had only increased by 28 per cent, in the intervening 15 years. It may be that the rationing imposed during the war created habits of

economy in clothing which have outlasted the disappearance of the coupons and ration books. It may well be that the tougher synthetic fibres are in some respects leading to a considerable economy in the consumption of textile materials. Fashion may have played its part in stripping the human body of a small fraction of the covering with which it would formerly have been clothed. Whatever the explanations, it Is evident that textiles have been losing badly in the race for the consumer’s choice. Other things, including food, the various mechanical gadgets of civilisation, and, on the capital side, the desire to produce still more power and heavy capital goods, have taken the greater part of mankind’s increasing real income.

Lag in Consumption This lag in the consumption of textiles, taken in conjunction with the increased dispersion of the Industry throughout the world and the wide measure of self-sufficiency attained by many countries which previously were large importers, adequately explains the focusing of difficulties in the textile industry on the export trade and, therefore, on the countries which previously catered for the export markets. A very illuminating report on the world market for textiles, which was recently prepared by the Secretariat of the General Agreement on Tariffs and Trades (GATT), shows that there has been a major shift in the international trade in textile goods. In 1953 they still accounted for nearly 5 per cent, of total world exports, as against 5J per cent, in 1938; but while in 1938 about 71 per cent, of there exports was directed to the nonindustrial regions, in 1953 that share had fallen to 58 per cent. It is interesting to note that within the increased share destined to the industrial world, the importance oi the United States rose, although the principal increases in imports of textiles were those made by European countries, notably Belgium and the Netherlands. One'of the most striking of recent developments has been the development of cottonatextile production in Latin America, which has replaced more than 60 per cent, of the cotton textiles that were imported by that area in 1938. It is also striking that the increase in the world’s cotton textile production since before the war has taken place entirely outside there areas, such as Great Britain, Western Europe and Japan, which are dependent on imports for their supplies of raw cotton. It is largely in India and the United States that the main contributions to the increased production oi cotton textiles has been made. We seem, in this phenomenon of the relative decline of international trade in textile goods and of the production of textiles, to be dealing with a basic trend. The authors of the report published from Geneva see no reason to expect that this tendency towards a falling volume of trade, both in the textile raw materials and in textile goods themselves, will be reversed or even halted. It is a warning which should be particularly heeded by the old-established textile industries, which in the past depended so largely on their export trade. It used to be said of the Lancashire cotton industry that it worked until breakfast for the domestic market and, thereafter, for exports. That was the case before 1914. Now the home market takes the production for all the working hours up to teatime, leaving a meagre margin for the export market. Fortunately, this has not meant the drastic decline of Lancashire which this change-over would seem to suggest. Other industries, notably engineering and chemicals, have come to diversify the economy of Lancashire: and although today complaints are certainly heard t from the textile industry in that area. ; the area as a whole can still be counted as one of the most prosperous in a prosperous Britain. 'lt would behove other great textile centres to show similar adaptability. ..