In mid-April 2020 ETSA, the European textile services association, representing national associations including the UK, had, under thew directorship of CEO Elena Lai, pictured, called for measures to restart the European economy and welcomed the NextGenerationEU recovery plan that was adopted at the end of that year. Three years later the Covid pandemic and its ramifications are still something our sector must continue to contend with, and in February of 2022, Russia invaded Ukraine in the largest European conflict since the Second World War.
With nations like Germany, Finland and Italy being heavily dependent on Russian gas, international sanctions against the Russian Federation have contributed to record spikes in energy prices. For instance, the price of diesel and petrol reached record highs in Germany in March of 2022. Furthermore, with more than 3 million Ukrainian refugees fleeing Ukraine and entering the borders of the Schengen area, this will drastically impact Europe's labour market going forward. While it's impossible to predict how long the conflict will go on and what its scope will be, it's evident that the European dependence on Russian fossil fuels is untenable, we can therefore expect a continued rise in energy prices as European leaders will scramble to offset costs and re-invest in green, sustainable and circular business models.
However, this transition is not something that can be done overnight, as a rise in prices (from both petrol sanctions and inflation) have contributed to significantly higher costs amongst many ETSA members. For instance, in Italy, since January 2022 gas and methane bills had an increase by 110% compared to January 2019 and In February 2022 the difference in the bill compared to the same period of 2019 constituted to an 85% increase. This situation is not unique to Italy or the European South, as our British national association, TSA have also struggled in the wake of rising costs, and are adamant that without government intervention many textile service organizations will be unable to continue as is, without raising costs on the part of consumers.
With textile services having one of the oldest circular business models currently existing, ETSA, its large companies, and National Associations are ready to adapt and on the move for a healthier, greener, and more digital as well as skills-oriented industry. However, in this transformation it is imperative we do not lose touch with the hard reality of COVID-19 and rising energy costs which are pressing challenges for our sector. In both the North and the South of Europe, the response of national governments and the EU has not been sufficient to help offset these costs, and if the situation remains unchanged, in many parts of Europe, we could see a decrease in the availability of essential textile services to the citizens of Europe.
ETSA and its members have been hard at work lobbying for this necessary assistance to supply the men and women of Europe with supplies that are essential to maintain their livelihoods, their health and their very way of life. Yet this is a time where energy consumption and its high costs- as well as the debates around the use of natural gas- are especially salient issues, not least because of the legally binding goals outlined by the EU Climate Pact.
The textile service industry has not lost its dynamic verve, its willingness to continue to be operative even under constraints, and conditions which are not ideal. In a recent survey which polled the most important national associations involved in the textile service in Europe over the last few months of 2021, it appeared clear that after being hit for two years in a row, the industry is cautiously looking to return to pre-covid business and revenues within a time frame of 12 to 18 months. Some companies (especially SMEs) have suffered more than others, but the EU and governmental stimulus packages from national governments across the board have allowed companies to avoid the worst-case scenario and ETSA remained in service to our members and national associations.
The sector is still fighting in our collective struggle against the pandemic, while public health experts have noted that "Omicron" is a much weaker health concern, it is not providing a reassuring economic forecast for our industry if we check the latest information shared by the textile services in Germany, Italy, France, Switzerland and the UK. Due to the threat of an endemic pandemic and in accordance with the ETSA Survey's main interim findings, the primary markets of the sector are still Healthcare, Hospitality, and Industry. In some places such as Italy, there are significant differences between the tourism laundry sector and the healthcare sector which cannot be underestimated in the overall picture and analysis. Furthermore, other key variables such as variant energy costs, labour mobility and regulations also likely play a huge role in the divergence we see in the post-covid recovery of textile services in Europe.
It is no surprise that the majority of those members interviewed highlighted a significant decrease of volumes treated (between 31% and 90%) in 2021 compared to January 2020 with a sharp total revenue loss of between 30 and 60% during the 1st half of 2021, an element that well highlights the constant challenge some of the national associations faced over these late two years of severe government lockdowns. The expectation for 2021 revenues was nevertheless looking positive: in the same amount of time (between 90 to 120 days) considered for 2020, the forecast for revenues in 2021 proved to be the same.
The key element of the workforce is also an important result of our ETSA survey- It is ageing and whilst the average number of employees in 2019 was 131 employees per company, in 2020 this figure fell to 115 employees per company and the sector has felt this decrease both in the healthcare and tourist laundry related sector. The Green and Digital transition which has been central to the European Union's recovery has allowed for strategic innovations and crisis management which has allowed businesses including those in the textile services industry to adapt however national and EU support will remain crucial in the forthcoming month.
If you'd like to see an infographic detailing the main findings from the ETSA survey and how it corresponds to the future of the textile services industry, you can download
'ETSA Industry Forecast (3.64 MB)' from the ETSA website