Bruised but not beaten, Europe’s textile industry is a perfect candidate for a greener and digital recovery
An unprecedented disruption in trade, manufacturing and retail activities, followed by a major economic crisis, will send the turnover of the European textile and apparel industry down by -19% in 2020.
The light and targeted lockdowns to fight the second wave of Covid-19 infections will constrain the pace of recovery. We expect global GDP to contract by -4.7% in 2020, followed by growth of +4.8% in 2021.
We estimate that 20% of those currently enrolled in short-work schemes face an elevated risk of becoming unemployed in 2021 because of the muted recovery in late bloomer sectors and the policy cliff effect.
Social Risk Index: Structural determinants of social risk
As the Covid-19 pandemic pushes the global economy into the worst recession since WWII, systemic social risk could become a more important factor of political risk and worsen the business climate in some countries.
For Kurzarbeit to prove successful, policymakers will have to walk a fine line between defusing the ticking labor market time bomb while staying away from fueling large scale zombie employment that could constrain the region’s growth potential.