One of the strongest economies in Europe, the German economy continued to grow in the first and second quarters of 2015. Gross domestic product (GDP) in the second quarter of 2015 grew 0.4% compared to the previous quarter and 1.6% year-on-year, according to the German Federal Statistical Office, Destatis.

Household consumption showed moderate growth compared to the previous year, increasing 1.8%, mirroring the 1.9% rise in government consumption expenditure. Year-on-year production figures were also higher in most areas during the period, Destatis reported.
These figures on the economy were researched before the VW emissions scandal was revealed and the textile care interviews also took place earlier.
However from some more recent research it seems that the general trends may still apply.
By the end of October, initial concerns about the potential negative impact of the VW emissions scandal looked to have been largely unfounded.
Hans-Werner Simm, President of the Munich-based Ifo Institute, said in statement accompanying the release of the institute’s monthly Business Climate Index on 26 October: "The Ifo Business Climate Index for German industry and trade fell 108.2 points in October, from 108.5 points in September."
He added that while companies were slightly less satisfied with their current business situation than in September, optimism about future business developments continued to grow. The German economy is proving remarkably resilient in view of this autumn’s multiple challenges.
Certainly the earlier interviews with suppliers to the textile care industry seemed fairly optimistic about the German home market.
At Alliance Laundry Systems, Christophe Sisternas, director of international marketing, said that consumer spending was being seen as the main engine for the growth that was expected this year and next.
He added that the slowdown in China, coupled with subdued demand from other emerging markets and the Eurozone, may impact the pace of growth, but "overall we believe the outlook for 2015/16 is a positive one for suppliers in the commercial laundry sector."
He believes the impact of the Eurozone situation on the German economy has been largely positive, although he does not discount future challenges.
"Germany invests significantly in its own industry and attracts outside investment thanks to its low energy prices and a labour market that is more flexible than that in other Western European countries," he explains.
An additional positive factor was that Germans are often inclined to take holidays in their home country which adds to an already healthy hospitality sector provides opportunities for companies supplying the OPL sector.
Sisternas says demand is growing for higher volume systems, in particular universal washer-extractors and dryers, both on-premises and off-site, to meet the needs of hospitals and other healthcare environments, and demand from retirement homes is also increasing.
The self-service/rental sector for cleaning overalls and work clothes also remains strong.
Stefan Vautrin, product manager laundry technology for the chemicals specialist Christeyns, agrees: "We have seen an upward trend in business activity due to the growth in the workwear and nursing home sectors and companies are outsourcing their work more.
He explains that consumers have seen their purchasing power increase, and, due to historically low interest rates, are spending their money willingly. The company therefore expects the laundry sector, including those focussing on workwear, to enjoy solid revenue growth,
Christeyns’ most popular products in Germany are its fully-built, heavy-duty detergents and paracetic acid-based bleach and disinfection agents. Low-temperature laundry systems such as its Cool Chemistry are helping laundries to reduce their energy costs and become more efficient.
However a note of caution comes from Reindert Baar, the senior marketing manager for SAT and training, textile care division for Ecolab Deutschland. He says that despite the strong economy, German consumers have become more cost conscious and are looking to optimise costs, accordingly.
He notes that new contracts/tenders are under price pressure and project scopes are shorter and mid-term.
Customers are looking for machines that optimise operational efficiency and increase the lifespan of textiles. Baar says Ecolab’s most popular products in Germany include water and energy systems that support sustainable laundry processes for healthcare, hospitality and industrial workwear, as well as low-temperature wash processes, including PERformance40 and OxyGuard40.
In addition, data management systems for controlling and optimising the laundry process, and safe and accurate dosing equipment are selling well.
With the expansion of the workwear market, Multimatic (Ilsa Deutschland) has seen growing interest in its automated conveying system for garments over the past year, according to CEO Dirk Freitag.
More drycleaners are using this system to make it easier for customers to collect their garments and hospitals and clinics are similarly using it to allow staff to collect their laundered uniforms.
Freitag explains that while some hospitals do launder their own staff uniforms around 80% outsource this work. It is processed at a centralised laundry and then returned and put onto the hospital’s conveyor service.
Freitag says the system is starting to be used in the chemical industry, where staff often have to change their clothes when they move from one lab to another, and in hotels for concierge and other service staff uniforms.
Uwe Stahl, sales manager for Gottlob Stahl Wäschereimaschinenbau, says that the challenge for the textile care market is to constantly upgrade their efficiency in order to counter the pressure that comes from falling prices.
Smaller laundries often have more difficulty investing in expensive technologies, so they are looking for practical, cost-effective solutions from suppliers, such as Stahl’s Atoll range of washer-extractors. It is also developing a range of dryers with very efficient heat-recovery devices.
He explains that it would not be justified to say that buyers are constrained in spending – although prices in textile care are under pressure – but buyers are becoming more aware of the need for cost efficiency and this influences their decisions. We are seeing increased interest from buyers in Germany, in Europe and from all over the world in our energy and water systems," Stahl says.
Peter Wennekes, CEO of CINET, agrees. "For 2015 the industry is expected to reach a 3.4 billion turnover in Germany. However, competitiveness is fierce, which results in major shifts of accounts annually and a strong pressure on prices," he explains.
"There is continuous consolidation. Companies are upscaling their activities to pursue cost leadership. Furthermore companies are searching for new business models to provide added value and increase profitability. There is a tremendous challenge, for instance with applying new textiles, and making use of smart digital applications."

Long-term investments
Interest rates are at a very low level and they are not expected to increase in the near future. Lars Blechschmidt group director sales and marketing at Kannegiesser says that as a result,
long-term investments have become "even more interesting".
He says the company is experiencing a phase where customers are not just replacing single machines but also modernising complete areas of the laundry such as the washroom or the flatwork finishing section.
Blechschmidt says logistics and material flows are becoming increasingly important and are leading to large investments in linen sorting, feeding, distribution, storage and synchronised data flow.
He adds that ensuring a constant flow of linen is becoming the basis for increasing productivity in modern laundries.
"This makes monorail systems for the storage and feeding of machines, and conveyor and logistics systems before and after ironer lines our most important products."

The minimum wage issue
Labour costs are, of course, a major component of the expense of running a laundry and on 1 January 2015 a statutory minimum wage of €8.50 an hour was introduced in Germany.
Florian Ott, technical sales at Ott Wäschereitechnik, the German dealer for Milnor says that although the minimum wage has been a controversial issue in the laundry industry, some laundries viewed it as a positive move.
"What we noticed was a significant group of laundries welcoming the minimum wage, since they were already paying their staff more than this," he explains.
"The laundries that had paid below minimum were destroying the prices on the market at the expense of their employees."
Some laundries had outsourced their businesses to neighbouring countries, such as Poland, in order to save labour costs but Ott says that as these countries develop the differences in labour costs have started to melt away.
So these companies now see outsourcing abroad not just as a cost saving excercise but also as an opportunity to supply fast growing markets, such as workwear or healthcare linen, in these developing counties.
In spring 2015, Pellerin Milnor opened the Milnor Warehouse Europe at the Ott site near Hamburg. The warehouse will stock Milnor washers with 27 – 125kg loading capacity. "Every now and then rumours have spread that Milnor will be pulling out of Germany and Europe," Ott says. "Opening a warehouse… is sending out a strong message to the market. Milnor is far away from pulling out."
Environmental legislation has long been stringent in Germany but awareness about environmental issues is continuing to grow.
Baar at Ecolab says sustainability is increasingly becoming part of the tendering process and, although laundry chemicals tend to have a certain advantage when it comes to meeting the various environmental certifications, chlorine and brighteners are becoming a point of concern.
In June, WIRTEX, the German Textile Service Association, and DTV, the German Dry Cleaning Association, launched the Nachhaltigkeitsallianz Textil Service (Sustainability Alliance Textile Service) to raise awareness of the responsibilities of the sector and to further build on the progress already made by the two trade associations.
"The effects of environmental, economic and social problems affect us all," the managing directors of the two associations, WIRTEX’s Dr Andreas Marek and DTV’s Andreas Schumacher, said at the launch of the initiative.
"Our industry has a responsibility to examine this impact and continuously improve, for the benefit of society. We therefore want to meet the associated challenges together."
The sustainability action plan includes projects in sustainable procurement, energy and resource conservation, education and training.

Drycleaning sector
It is a less rosy picture for the drycleaning sector in Germany, where the number of drycleaners is continuing to shrink. "There is not enough margin for drycleaners to invest in machines at present and only 10% of the shops are really doing well – the rest are not earning big money," according to Alex Arrighi, international sales and marketing director for Böwe Textile Cleaning.
In 2015, the company celebrated the 70th anniversary of its founding with the launch of the Black Forest Edition, an addition to its Premium Line drycleaning machines. The name refers not only to the company’s location but also to the special coating on the machine, which the company says reduces solvent consumption and improves cleaning.
"There is still a lot of discussion about the different solvents," says Arrighi. "Germany introduced a lot of regulations and legislation in the past and is a leader in solvent and emission saving."
Nearly 90% of drycleaning machines are externally financed by the manufacturers or by finance service providers, according to Robin Schmitt, marketing leader at EFIT, the European Research Association for Innovative Textile Care. "The situation is not bad but the markets are becoming more volatile, leading to growing scepticism.
However, as he points out, there is a growing number of young, well-educated entrepreneurs with a high awareness of sustainability, quality and marketing.

Promoting the PTC market
In 2014 EFIT launched the fashionCare standard for textile care companies to use to demonstrate to their customers their commitment to high standards of work, cleanliness, quality and service and of their equipment.
The number of fashionCare members is growing.
Such promotion is badly needed, according to Wennekes at CINET. "The main concern for the industry, especially in drycleaning (B2C markets) is that there is too little effort in communicating to the customer,"
"The image of theindustry is generally somewhat dull and old fashioned and people are unaware of all the services that a modern Professional Textile Care (PTC) business can offer.

Alternative benefits
Marco Niccolini, general sales and marketing manager for Renzacci, says drycleaners in Germany are becoming more aware of the benefits of the alternative solvents and there is also growing awareness of the benefits of wetcleaning and the need to use both in a more professional approach to cleaning.
"Due to the new alternative solvents, there has been an increase in the overall amount of garments treated with solvents," Niccolini says.
" Until around three to four years ago, there was a massive use of perc so people preferred to have their clothes treated with water, as perc couldn’t treat a lot of materials. Now they are coming back to drycleaning."
Renzacci sells mainly natural solvent and K4 machines in Germany, such as its Nebula models, as well as washer-extractors of 16 – 22kg capacity for professional wetcleaning.
One of the challenges to watch over the next few months, according to Niccolini, will be the impact of the refugee crisis on the German economy. "It will change the situation regarding public expenditure in Austria and Germany," he suggests. "If you consider the cost of the intervention that the Eurozone will have to bear, it is far more expensive than the intervention for Greece."
However, Schmitt is more optimistic: "The refugee crisis can be seen as an opportunity to recruit new employees. The problem will be to integrate those people fast into staff and into the business process within the organisation."
All agree, however, that the German economy is one of the strongest in Europe and likely to remain so.

COST EFFECTIVE SOLUTIONS: Stahl of Germany says that smaller laundries often have more difficulty investing in expensive technologies, so they are looking for practical, cost-effective solutions from suppliers. Stahl’s range of washer-extractors and dryers are seen in use at a small hotel laundry at Gasthaus Rebstock in the Black Forest