88% of the companies in the clothing category recorded a drop in their sales volume in April. This was stated in a recent report by the Proteger Foundation, a non-profit organization that brings together the agro-industrial textile value chain.
Textile companies: the conclusions of the report
- 80% of the companies surveyed recorded drops in their use of installed capacity. The average drop was -29 pp
- 64% of companies have taken some measure that affected employment.
- The number of jobs decreased by 42% in April 2024 compared to December 2023.
- 87% of companies will not make investments during 2024 and/or have canceled previously planned investments.
- 35% of companies have shown difficulties in meeting the payment of their current obligations.
The sharp drop in activity has been sustained in the first four months of the year, is occurring across the board in the different areas of the chain and is impacting employment.
For the majority of companies (71%) the drop in sales to the domestic market exceeded 21%. The average sales decline was 36%.
The average production decline It was equivalent to -37%, 2 pp more contraction than Jan-Feb 24. The drop in production was greater than 20% for 73% of the companies.
Why did textile production fall?
According to the companies, the drop in production is due to the following factors: a 86% to changes in the purchasing power of the population34% to economic expectations, 25% to the variation in costs in raw materials and inputs, 22% to a change in the participation of imported goods in consumption, 14% to exchange appreciation and 14% to changes in sectoral industry policies.
Employment: what happens in the textile industry
64% of companies have taken some measure that affected employment during the second two months of 2024, with the The first three options selected were “cancellation of overtime”, “dismissals”, “suspensions” and “advance of vacations”.
This figure indicates a worse situation compared to the first two months of the year, when only half of the companies surveyed had taken measures that affect employment.
36% of the companies surveyed have not affected employment so far this year.
51% of the. Companies maintained the number of jobs on April 24 compared to December 23, while 42% decreased the number of jobs. Only 7% increased their staff.
Among the companies in which employment fellthe average contraction in employment was -14%.
As of February 24, the drop in jobs compared to December 23 only affected 21% of the companies surveyed. That is to say, the loss of employment in the sector has worsened in the last 2 months.
Exports in the textile industry
According to the report, only 28% of companies have made sales abroad in the last 5 years but 35% of the companies surveyed plan to export in 2024.
The majority of the companies surveyed (72%) consider that there are difficulties in exporting. The main obstacle encountered is the exchange rate (68% of companies that consider that there are difficulties). Secondly, tax pressure (58% of companies), followed by bureaucratic obstacles and macroeconomic volatility.
Source: Ambito
