Outlook: Courtaulds

THIS IS a grim statistic that tells the tale of inexorable decline. The UK textile industry has underperformed the rest of the stock market virtually every year for the last two decades. This year it has surpassed itself with an underperformance of 60 per cent. This, then, is not a story of a sudden seizure, but of a long, lingering illness turning into a terminal one.

In recent months, scarcely a week has gone by without a profits warning at one of Britain's leading textile producers, generally accompanied by large scale job cuts. Courtauld Textiles announced a further 1,200 yesterday, bringing the total in the industry to more than 2,000 this month alone. There are reports of up to 60,000 textile jobs going over the next two years as the industry slides into the abyss.

Some of the reasons for the demise have been well chronicled; the strong pound and weakening consumer demand at home have been like a hammer blow to the industry. Added to this is the relatively recent phenomenon of mighty Marks & Spencer changing its buying patterns.

M&S's power in the UK textile sector cannot be under-estimated. It still buys 70 per cent of all its goods (including non-textiles ) from the UK. Last year it bought pounds 5.7bn worth of UK textiles, accounting for a third of the industry's output. So when the giant of Baker Street sneezes, the sector cannot help catching a cold.

When M&S called its major textiles suppliers together for a crunch meeting in September, the writing was on the wall. M&S wanted its suppliers to cut costs, and for most of those present, that meant shifting more manufacturing to cheaper countries like Morocco, Turkey and the Far East. The slump in sales at M&S since then and the appointment of a new chief executive under pressure to implement change, will accelerate the process.

Britain may still be among the world's best when it comes to street fashion and dainty lace. But sadly, it looks like the rest of the sector will be applying for its passport before the century is out.