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Productivity, Machinery and Skills: Clothing Manufacture in Britain and Germany

Published online by Cambridge University Press:  26 March 2020


This study compares samples of matched plants in Britain and Germany engaged in the manufacture of women's outerwear; it follows earlier matched plant studies, also published in the National Institute Economic Review, which examined matched plants in metalworking and furniture manufacture in these two countries. German clothing manufacturers specialise in high-fashion items produced in great variety of which a high proportion is exported at high unit prices; the typical British manufacturer concentrates on more standardised items produced in long runs and is consequently more vulnerable to competition from lower-cost producers in developing countries. The study examines the contribution of machinery, new technology and skills to differ ences in clothing productivity in the two countries. A final section discusses future trends in the industry in the light of the 1992 proposals for a Single European Market.

Copyright © 1989 National Institute of Economic and Social Research

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(1) See A Daly, D Hitchens and K Wagner, ‘Productivity, machinery and skills in a sample of British and German manufacturing plailts: results of a pilot inquiry’, National Institute Economic Review, February 1985; and Hilary Steedman and Karin Wagner, ‘A second look at productivity, machinery and skills in Britain and Germany’, National Institute Economic Review, November 1987.

(2) Freight costs (by sea) from the Far East are estimated as 5-8 per cent of the retail price of a garment.

(3) Business Statistics Office PA 453 Report on the Census of Production, clothing hats and gloves Table 4, HMSO 1986. Department of Employment, Employment Gazette, January 1987 Table 8. German Statistical Office Produzierendes Gewerbe Fachserie 4, Reihe 7.1, Beschäftigte und Umsatz in Handwerk, 4 Vierteljahr 1986. Amtliche Nachrichten der Bundesanstalt für Arbeit, No.6/1988, Table 1/44. There is much sub-contracting in this industry, and much production continues to take place at home by outworkers and is not covered in official Censuses. Official statistics for this industry must therefore be taken with some reserve (see Appendix A, final paragraph).

(4) Wages in the German clothing industry for 1937 (extrapolated from 1985) were some 56 per cent above the rates in the British industry at market exchange rates. At the lower 1988 exchange rate the gap is of the order of 50 per cent. Social on-costs are also higher in Germany than in Britain—they constitute 62 per cent of hourly earnings in Germany compared to 31 per cent in Britain. At 1987 exchange rates total labour costs in the German clothing industry were twice as high as in Britain. Sources: Department of Employment New Earnings Survey 1985 Part C Table 54; Statistisches Bundesamt Statistisches Jahrbuch 1986 Table 21.3; Eurostat Labour Costs 1984 Volume 1 Tables 16 and 46.

(5) M Wolf, H Glismann, J Pelzman, D Spinanger, Costs of Protecting Jobs in Textiles and Clothing, Trade Policy Research Centre, 1984; J de la Torre, Clothing-industry Adjustment in Developed Countries, Trade Policy Research Centre, 1984; W R Cline, The Future of World Trade in Textiles and Apparel, Institute for International Economics, 1987. J Zeitlin and P Totterdill, ‘Markets, Technology, and Local Intervention: The Case of Clothing’, in P Hirst and J Zeitlin (eds), Reversing Industrial Decline?, Oxford: Berg, 1988. This article points out a number of factors, including more flexible micro-processor controlled technology, and quick response to changes in demand which may be beginning to reverse the trend in competitive advantage away from low-wage developing countries.

(6) The impression we obtained was that of the order of 100,000 persons were engaged on either full-time or part-time work in the informal ‘grey economy’ in Britain, producing for wholesalers, or for sale on street markets, or as sub-sub-contractors of larger ‘official’ producers; some are outworkers or homeworkers, others bring their materials to machine rooms. At least some of this production finds its way into the multiple retail outlets. The main centres are in East London, the West Midlands, and NW England (see Appendix A). The tradition continues in this trade of providing homeworkers with an extra set of cut materials for every dozen required—ostensibty to allow for errors but in reality by way of payment in kind (known in the trade as ‘cabbage’). Whilst the uniformity of human nature would lead us to expect similar phenomena in Germany, our enquiries there were met only with the formal response that ‘such activities are not found here’.

(7) M Wolf et al., op. cit. Table 3.16.

(8) Confirmed by clothing manufacturers who exported successfully to Germany who told us that the middle to upper range of the German market for women's clothing requires higher manufacturing quality and a greater variety of high quality materials than does the equivalent market segment in Britain. German women spend 55 per cent more (in volume terms) on clothes than British women and this difference is reflected in the wider variety of styles and higher quality of goods made available by German retailers (Eurostat, Comparison in Real Values of the Aggregates of ESA, Luxembourg, 1983, pp.59, 254).

(9) The difference is not statistically significant (only a sixth of the sampling standard error).

(10) Significant at the 1 per cent level.

(11) Sampling standard error of ±37 per cent.

(12) Significant only at the 10 per cent level.

(13) Department of Trade and Industry: Business Statistics Office, SDO25 Business Monitor Retailing 1984, Table 15, p.63; P Kessler, BBE-Branchen report, Textil-Bekleidung, p.179, Cologne 1987, With the exception of C & A, no German chain has more than 200 outlets whereas Britain counts 10 clothing retailers with more than 500 outlets.

(14) This point is also emphasised in A D Morgan British imports of consumer goods CUP 1988 p.19, ‘The market is retailer-led. It is not uncommon in interviews for such remarks to be made as: ‘The manufacturer must do as he's told’.

(15) U Adler, Wettbewerb, Technik und Arbeitsgstaltung—neue Tendenzen im Bekleidungsgewerbe? p.15 Ifo-Institut fOr Wirtschafts forschung e.v. Munich 1988.

(16) Total value of production of women's outerwear in the UK (Activity Heading 4533 and part of 4536 of the SIC) adjusted to correspond to the German commodity categories and grossed up (see footnote f p.4 Business Monitor PQ 4536) to allow for firms with less than 25 employees was £1237 millions in 1984. The corresponding German figure (increased by 15 per cent to allow for firms under 20 employees) for 1985, (SYPRO No. 6412 and part 6413) was E1856 millions converted at a PPP rate of exchange of 4.77 DM = £1. (See Appendix B for reservations concerning this PPP). British exports of all goods classified to Activity Headings 4533 and 4536 constituted 20 per cent of the value of production in 1965, the corresponding German figure was 40 per cent. The value of British exports of all clothing classified to Activity Headings 4533 and 4536 was £420 million in 1935; the value of German exports of women's outerwear in the same year was £936 million converted at the official exchange rate of 3.82 DM = £1. Sources: Department of Trade and Industry, Bulletin of Textile and Clothing Statistics, Annual Edition 1987 Table 10. Business Monitor PQ 4536 Fourth quarter 1984, Table 1, Business Statistics Office.

Statistisches Jahrbuch 1986, Table 9.18 Statistisches Bundesamt; Verband der DOB-Industrie, Zahlenspiegel der DOB-industrie, 1985, Cologne.

(17) At market (1986) exchange rates. The higher German export price is in line with higher prices (average values) received by German manufacturers for main product groups, for example the average ladies suit manufactured in Germany sold at two-and-a-half times the average price (at market exchange rates) of the corresponding items in Britain. Sources: Department of Trade and Industry, Overseas Trade Statistics of the United Kingdom 1985, Table VI, HMSO 1986; Statistisches Buudesamt, Aussenhandel, Fachserie 7, Reihe 8, pp.495-515, Fachserie 6, Reihe 2, Spezialhandel nach Waren und Ländern, December 1986 Fachserie 7, Reihe 2, Aussenhandel nach Waren und Ländern, December 1986, plus own calculations.

(18) In brief, developed countries, in order to control total imports from each low-cost country, issue counterpart import licences to each importer to the agreed total quota level. Since 1974 these agreements have mainly been reached within the framework of the Multi-Fibre Arrangement. Both Germany and Britain participate in this Arrangement, although the negotiation of quotas is undertaken by the European Commission on behalf of member states by the Commission after a process of negotiation, based on a breakdown of past imports expressed as a percentage of GDP. The volume of imports and the percentage increase allowed each year for each category of clothing is thus fixed in advance and does not fluctuate unpredictably from year to year. Imports above the agreed quota level for one item are sometimes offset against other items, or between EC countries, after negotiations with the appropriate bodies within the European Commission. A full account is given by Z A Silberston, The Multi-Fibre Arrangement and the UK Economy, (HMSO, 1984).

(19) Outward processing plus own imports of the women's garments manufacturers have been estimated to be up to 30 per cent of total imports; for men's garments up to 50 per cent (see R Jungnickel, U Maenner, Eigenimporte der deutschen Industrie p. 73, Veröffentlichung des HWWA Institut für Wirtschaftsforschung, Verlag Weltarchiv, Hamburg 1984.

(20) Under MFA rules, only 30 per cent of the value of each manufacturer's production can be transferred to outward processing.

(21) Goods made in East Germany may be freely exported by West Germany to any EC member state. Other outward processed and imported goods are not required to show a country of origin label when sold in West Germany, but if exported the label would show the country of origin, that is the country where outward processing had taken place. These goods cannot be put into free circulation in the EC. A member state may choose to regard outward processed goods from Germany originating in for example South Korea as part of the importing member's quota of imports from South Korea. If this is exceeded, an appeal can be made to the European Commission. A recent decision by the European Court of Justice appears to imply that country of origin labelling can now no longer be a requirement in Britain. The Department of Trade and Industry is (1988) in the process of drafting the necessary legislation.

(22) A fuller description of the range of new technology available to the clothing industry can be found in H Rush and L Soete Ch. 4, ‘Clothing’ in Technological Trends and Employment: 1, Basic Consumer Goods (ed. K Guy), Science Policy Research Unit (Gower, 1984),

(23) 'Most of the innovations [in machinery] appear to have originated in the United States. Other improvements in cutting and sewing machinery have originated in Germany and the Scandinavian countries … home machinery suppliers, to a considerabls extent, make American machines under licence and act as agents for Continental machinery manufacturers'. Margaret Wray, The Women's Outerwear Industry, pp.87, 88, Duckworth 1957.

(24) See S J Prais, Productivity and Industrial Structure, p.374, 1981 note 35.

(25) Supervisors in Germany are commonly required to complete a daily schedule for each style. This schedule shows production targats and actual production for each stage of the garment and helps the supervisor to see where production is behind target and where extra resources are needed. In the British plants we visited, supervisors generally took responsibility only for ensuring that lines were ‘balanced’ that is each machinist had sufficient work—but not for meeting production targets and deadlines.

(26) The examinations compared are for City and Guilds courses no 460, and the German courses for Textilenarbeiter (Groups 3510 and 3520). City and Guilds Examination Statistics 1986-7, Statistiches Bundesamt, Fachserie 11, Reihe 3, Berufliche Bildung, Table 17, Wiesbaden 1986:

(27) ‘Clothing World’ CAPITB Oct. 1988 Issue 17 p. 11.

(28) City and Guilds courses, which are similar in standard to the German qualifications, teach basic pattern-making, and knowledge of the clothing industry; students also make several complete garments for their practical skills test, and provide written answers to examination questions on, for example, properties of fabrics, garment construction, costing of garments, systems of production. There are exceptions to the above generalised account of British current practice which demonstrate that the goals of City and Guilds are realistic for a substantial proportion of YTS trainees. A leading London college at present takes all its YTS trainees to the level of Part I City and Guilds 460. About two thirds of the intake were expected to obtain the Part I qualification and to proceed to Part II in their second YTS year. The enthusiasm of the students provides further confirmation that such a course constitutes a manageable challenge.

(29) British trainees are expected to perform these operations to 75 per cent of the average operator speed. German trainees do not have to reach a specified speed in the operations learnt, but apprentice Meister estimated that they would achieve between 50-70 per cent of the adult speed.

(30) Information kindly supplied by the Clothing and Allied Products Training Board (CAPITB).

(31) E Leamer, Sources of International Comparative Advantage, Fig. 3.1, p.71 and Table B2 p.228, MIT Press, 1984.

(32) This conforms closely with a previous comparison carried out for the Clothing Industry Productivity Resources Agency about ten years ago. That comparison was based on just one German firm and 20 British firms: it found—very similar to our observations—one checker (‘examiner’) for 30 machinists in Germany, compared with one for 8 in Britain (A Productivity Survey of the Ladies' and Children's Light Outerwear Section of the British Clothing Industry, Clothing Industry Productivity Resources Agency, Leeds, March 1980, p.20). That organization carried out much useful work of the type mentioned; it was closed down in 1987.

(33) ‘It is easy to forget that inexperienced operatives do not have these skills and that they need extra support. Time must be spent teaching them how to observe and analyse work passing through their hands’. D Tyler ‘A Quality Problem during Blouse Production’, Hollings Apparel Industry Review Vol.5, No. 1, p.20, Spring 1988.

(34) For a full account of the German Meister qualification see S J Prais and Karin Wagner, ‘Productivity and management: the training of foremen in Britain and Germany’, National Institute Economic Review, February 1988.

(35) Approximately a third with a clothing technician qualification (two years full-time higher education at the Fachschule after a three-year apprenticeship), a third with a Meister qualification and a third with a four-year full-time degree equivalent training at a Fachhochschule (clothing technologist).

(36) Undoutedly, 1992 will also offer some new opportunities to the British industry; the opening up of public procurement leading to greater access to contracts for long runs of garments may benefit efficient mass producers of standard garments. British multiple retailers at present specialising in British-made clothes may succeed in establishing themselves in Europe on a larger scale with some consequent benefits for their main British suppliers. Such expansion may, however, benefit Euopean producers rather than the British, unless British manufacturers can match their European counterparts in style and flexibility. British multiple clothing retailers already source some high fashion items in Germany and Italy. Branches of a large British-owned multiple retailer in France are largely supplied by French clothing manufacturers.

(1) M Breitenacher, S Paba, G Rossini, The Cost of Non-Europe in the Textile-Clothing Industry, Institut für Wirtschaftsforschung-Prometeia Calcolo Sr 1987, pp.14-18. G Rossini, Price Discrimination in the European Clothing Sector, Paper presented to 15th annual conference of the European Association for Research in Industrial Economics, August 1988

(2) Much the same general argument has been put forward by L A Winters, Completing the European Internal Market: Some notes on trade policy, Centre for Economic Policy Research, Discussion Paper No 222 January 1988. However, his paper's conclusions on the direction of price-movements are based on illustrative prices for jeans in Britain and Germany in 1982 which seem to be unrepresentative, and contrary to our own observations for 1988 and those of Rossini (op. cit.) for 1985. Professor Winters has been good enough to tell us that in view of the current facts, he accepts that the likely movement of prices in 1992 is as stated in the text above.

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