Before the process of reopening the economy, the garment and textile export sector operated with 15 thousand workers, but with the elimination of some restrictions, the activity of the companies increased and now employs 45 thousand people.
Following the spread of the virus globally and the suspension of some production in China, several garment companies in the region have reported increases in their orders.
The spread of the epidemic has stopped much of the economic activity of the Asian giant, which is the largest exporter of textiles in the world. This situation has forced buyers to look for alternatives.
Between 2010 and 2019 exports of textile companies in Guatemala reported an average annual growth of 2%, a rise that is attributed to demand from companies in the United States.
According to figures from the Bank of Guatemala (Banguat), the manufacture of clothing items was the sector that generated more foreign exchange during the past year, as revenues amounted to $ 1,397 million.
With the recent signing of the U.S.-Canadian-Mexican trade agreement, a precedent was set for future negotiations, as this agreement sets binding labor conditions, such as making exports subject to the payment of a minimum wage.
For example, one of the conditions of the Treaty between Mexico, United States and Canada (T-MEC), which was signed on December 10, 2019, is that vehicles exported from one state of Mexico to the other two countries "must come from plants that pay wages not less than $16 an hour.
Although Guatemala's foreign sales continue to decline, an improvement is expected towards the end of the year, which would be explained by a rebound in the prices of some agricultural products.
Figures from the Bank of Guatemala (Banguat) specify that in the first six months of the year sales abroad totaled $5,666 million, a figure that is just 0.3% lower than the $5,681 million reported in the same period of 2018.
Guatemalan exporters report that President Trump's warning about export tariffs and taxes on remittances and transfers is raising doubts among U.S. buyers.
Uncertainty prevails among most Guatemalan businessmen after President Trump reacted to the provisional protection established by the Guatemalan Constitutional Court, which limits the functions of the Executive Branch to negotiate or sign any foreign policy agreement.
Guatemala's business sector responded with concern to President Trump's warning about imposing export tariffs and levies on remittances and transfers.
The announcement made by the president of the United States comes after the Guatemalan Constitutional Court issued a ruling in which it limits its foreign policy functions to the Executive, by granting a provisional injunction that prevents the negotiation or signing of any agreement.
During the first two months of the year, exports of the Guatemalan textile sector registered a 4% year-on-year increase, which is explained by demand from U.S. companies.
According to the most recent figures from the Bank of Guatemala, between the first two months of 2018 and the same period in 2019, overall exports fell from $1.808 million to $1.751 million.
After a 7% increase in exports during 2018, Guatemala's apparel and textile sector expects to reach $2 billion in sales this year.
Factors such as the crisis in Nicaragua and an increase in customer demand in the United States partly explain the growth reported last year by textile companies in Guatemala.
The political situation in neighboring Nicaragua led to an increase in the number of work orders, and the 8% increase in U.S.
Businessmen consider that 2018 will be a year with record sales for the country, as they projected exports of $1.724 million, a figure that would exceed 12% of what was reported in 2017.
Representatives of the Apparel and Textile Industry Association (Vestex) reported that they have recently reviewed the figures, and they estimate that this year the sector will have double-digit growth compared to 2017.
Two companies are expected to complete certification this month to provide the electronic tax stamps service in Guatemala, and by January 2019 they would be operating throughout the entire customs system.
In July of this year, it was announced that the tender for the service of electronic tax stamps for containers in Guatemalan customs would no longer be carried out, allowing several companies to provide their services independently.
In line with the decline reported since the beginning of the year, up to July, sales abroad totaled $6.455 billion, 3% less than what was recorded in the first seven months of 2017.
According to Óscar Monterroso Sazo, general manager of the Bank of Guatemala (Banguat), "... a fall in international prices of the four main agricultural products which are coffee, sugar, banana and rubber, is the reason for the drop in sales abroad."
In the first quarter of the year textile exports generated revenues of $192 million, 7% more than in the same period in 2014.
A report by the Bank of Guatemala indicates that as of February articles of clothing were the second most exported product. During 2014 this sector generated approximately $1.5 billion in exports, representing a growth of 12.6% in export volume.
Between January and May, recycled plastic exports generated revenues of $2.2 million.
Jalil de Leon, executive director of the union of plastics companies attached to the Chamber of Industry of Guatemala (CIG), said that the domestic industry is also taking advantage of this market, a sector which reported growth of 12% in terms of the volume of what is recycled and transformed.
Representatives from the Institute for Exports and Fashion in Colombia are visiting the country in search of investors who wish to form strategic alliances.
The visit by the Colombians will be held prior to the textile and fashion show Colombiamoda 2013, to be held in Medellin from 23rd to 25th of July.
According to Carolina Fernandez, business coordinator of the Institute for Export and Fashion (Inexmoda), "Colombian brands are interested in making alliances and offering franchises in Guatemala". Among the companies interested in entering the country are: Arturo Calle, which sells clothing for executive men and Agua Bendita, which sells lingerie and swimwear.