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Fashion Week: Dapper Peter Mandelson pays tribute to a sector that has become the UK's sixth biggest industry

WEARING A dark grey Richard James suit and a pale blue Hilditch and Key shirt, the clean-cut, square-jawed Peter Mandelson, the Trade and Industry Secretary, stepped forward at London Fashion Week yesterday and congratulated Britain's designers.

The dapper Mr Mandelson did a reasonable job of blending with the perfectly coiffed hordes in the Natural History Museum, but his presence was also an indication of the growing importance of Britain's all-conquering designers to the British economy.

The clothing industry employs 213,000 people, and produces goods worth pounds 7.9bn a year according to the latest figures, making it the country's sixth biggest manufacturer.

Though there have been some recent, well-publicised failures - such as Oswald Boateng's closure after the cancellation of pounds 1.5m in orders from recession-struck Japan - clever marketing and branding by more exclusive labels has seen designer exports grow to 70 per cent of the market.

"It's very much an export-led business," said John Wilson, director of the British Fashion Council. "The wider clothing industry has been hit by the high value of the pound and the economic problems occurring in the Far East.

"But within the designer sector, the problems are much less severe. We're talking about brands, and the brand images are so strong that they are less price-sensitive," Mr Wilson said.

Despite the global economic downturn, a record number of overseas buyers has registered for this Fashion Week.

Although that doesn't necessarily mean there will be a record amount of sales, it bodes well for the 210 houses in the design sector, which rely on the export market for 70 per cent of their production.

The importers of our fashions are Japan, the United States, Germany and, in the ultimate compliment to Paul Smith, Katharine Hamnett, Margaret Howell and their peers, Italy, the land of Gucci, Prada, Armani.

Japan's crash may have claimed the business of Mr Boateng, one of Savile Row's most original tailors, but Smith, Vivienne Westwood and Alexander McQueen are all thriving in Tokyo.

"They are cult brands and people will continue to buy them, there isn't really any competition," said one person close to one of the designers.

Showing a flair for international economics is almost as important as a flair for hemlines and colours; the latest target of the export drive is America, seen as a relatively unexploited market.

Saks Fifth Avenue, the New York equivalent of Harvey Nichols, held a British Designers' Week earlier this month. "They love Brits over there, and they can sell their stuff at a premium," said someone involved with the project. "On the East Coast it's seen as exclusive, even though the American market is quite conservative." Mr Wilson says that, as with the best investors, design houses are hedging, with an increased interest in the British market and diversifying activities here.

Some design houses are making diffusion (secondary) brand clothes for High Street retailers; others are starting businesses consulting the likes of Marks & Spencer about their new ranges.

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