The impact that the crisis will have on companies related to the textile, leather and clothing sector in Central America is estimated to be explained, to a greater extent, by the expected drop in sales of carpets and curtains.
According to businessmen in the country's textile sector, as a result of the covid-19 pandemic, a reduction in work orders is expected during the second half of the year.
Representatives of the Nicaraguan Association of the Textile and Clothing Industry (Anitec), predict that with the closure of the stores of several of their clients, sales will be reduced considerably and inventory levels will increase.
Grupo Elcatex inaugurated the first phase of the San Juan Innovation Park in Choloma, which has 107 thousand square meters of construction and required an initial investment of $240 million.
In its first stage of development the industrial complex has a cotton spinning and blending plant, a textile plant and an electricity generating plant with a capacity of 57 MW.
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.
The American Aalfs Uno, which operated in the municipality of Sébaco, in Matagalpa, closed its operations in the country due to a reduction in the number of contracts.
The closure of the company was made official by directors of the Nicaraguan Association of Textiles and Apparel Industry (Anitec), who say it is the first company in the U.S. capital sector to close in the country.
Despite global threats, such as the possibility of a global economic slowdown, businessmen in the sector are confident that their sales will continue to rise.
Companies operating under the free zone regime in the country, estimate that their sales abroad during 2019 amounted to about $ 1.7 billion, an amount that exceeds by 5% what was recorded in 2018.
Because there is still no regulation for part-time employment in Guatemala, textile businessmen estimate that the country loses between 40 and 70 thousand jobs.
For representatives of the Costume and Textile Commission (Vestex), the high operating and labor costs in Guatemala cause businessmen to send cut pieces to Honduras, El Salvador and Nicaragua to be assembled.
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.
In the first nine months, sales of transformation goods totaled $3.220 million, of which $2.637 million came from the textile industry.
The result of the commercial balance of goods for transformation (Maquila), accumulated to the third quarter of 2018, showed a surplus of US$1,024.1 million; behavior derived from the year-on-year increase of 4.0% in exportations, which totaled US$3,219.7 million in the mentioned period, partly counteracted by imports of raw materials of US$2,195.5 million, informed the Central Bank of Honduras.
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.
Imports of garments and clothing accessories reached $332 million during the first three months of the year, 3% more than what was reported in the same period in 2017.
Figures from the information system of the Central American Clothing and Clothing Accessories Market, from the Trade Intelligence Area of CentralAmericaData: [GRAFICA caption="Click to interact with the graph"]
Basically explained by the rebound in external demand, the Gross Production Value of the maquiladora industry in the country increased by 3.9% between 2016 and 2017.
According to the results of the annual survey 2017 directed to the companies of the Industry of Transformation Goods (Maquila) and Related Activities, the Gross Value of Production in the current values of the maquiladoraindustry increased in 3.9% inter-annually (-0.1% in 2016), basically explained by the rebound in external demand. On the other hand, foreign direct investment in maquila activities increased 21.3%, associated with greater capital contributions for the construction of new textile plants and the expansion of the harness industry, reported the Central Bank of Honduras BCH.
In Honduras, the goal that companies in the sector have set is to create 15,000 jobs in 2018, and the number of posts generated from January to August adds up to 11,234.
According to figures from the Honduran Maquila Association (AHM) at the end of 2017 the number of positions in companies in the sector totaled 145,595, and the goal they have set is to end 2018 with 160,000 people working in maquilas.
The manufacturing industry, including maquilas, accounted for 96% of total exports, and closed with an annual growth rate of almost 4%, equivalent to $130 million.
From a statement issued by the Central Reserve Bank:
Exports of goods from El Salvador amounted to US $3.5596 billion between January and July 2018, higher by US $124.5 million compared to the same period in 2017, the Central Reserve Bank reported.
In the first quarter of the year, companies in the country imported $5 million worth of yarns and textile supplies, 15% more than what was purchased in the same period in 2017.
Figures from the Information System on the Textile and Textile Supplies Market in Honduras, compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption = "Click to interact with the graph"]
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