Croatian textile industry in European Union - competitiveness and importance for economy

Abstract

This paper reviews the overall importance of the textile industry in Croatia. The term textile industry comprises the production of textiles and clothing. Authors are attempting to measure the importance of the textile sector by deploying the CMS analysis. Such analysis is used to quantify the export performance of Croatian textile industry compared to the rest of the world and individual foreign markets (EU 15, EU 27). The analysis revealed rather disappointing results in terms of the competitive position of the textile industry. However, the analysis enabled a clear identification of the root causes of the competitiveness loss. In the second part of the article, we deployed input-output analysis, exploring the recently published input-output table for the Croatian economy. Such analyses provide the framework necessary for measuring the overall importance of textile industry for the Croatian economy in terms of gross output, value added and employment. It also facilitates benchmarking of results with other industry activities in Croatia and to some extant other countries. Multipliers for textile industry, as far as output and value added are concerned, are low, while the opposite holds for direct effects on employment. Overall multipliers for Croatian economy are “shallow” reflecting the nature of service based economy on one hand but also the loss of competitive position in manufacturing industry. The manufactures of textiles and of wearing apparel; dressing and dyeing of fur, have a quite strong direct mutual interrelationship, albeit the two sectors are weakly interconnected to the rest of the economy and have limited impact. They seem to function as an isolated cluster.