Textile Sector Loses Competitiveness

In recent years, the sector in Guatemala has lost nearly 30,000 jobs, because the high costs resulting from having one of the highest minimum wages in the region, makes it more profitable only to export raw materials, rather than making them in the country.

Monday, June 17, 2019

Vestex figures show that in recent years several jobs have been lost in the sector, given that between 2006 and 2018 the industry lost a considerable number of jobs, going from 82,109 to 53,636 places, equivalent to a 35% decrease.

You may be interested in "Textiles: Regional Purchases up to September 2018

Alejandro Ceballos, president of Vestex, explained to Elperiodico.com.gt that "... the decrease is because clothing is not sustainable so its production is in exporting raw material and not generating labor within the country. The fabrics we send already have an added value, it is stamped, dyed, the yarn is made and woven, but it is easier to export it to be made here. With this we lose."

Regarding foreign sales of raw materials, it was reported that during 2018 Guatemalan companies exported $202 million worth of fabrics to other Central American countries, being El Salvador and Nicaragua the main destinations, since together they accounted for 75% of total purchases.

Ceballos added that "... one of the biggest disadvantages is the handling of the minimum wage, because it is one of the highest in the region. The salary plus the bonus in the nation is US$508.75, while in El Salvador it is US$368.04; Honduras, US$406.79 and Nicaragua US$247.28. 'It's not that we don't want to pay. It's the conditions that make the investment go away.

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