Against the backdrop of an imbalance in trade and restrictions decreed in several markets around the world, Central American companies in the garment business are operating and generating export earnings at levels that merely allow them to subsist.
Data from the Office of Textiles and Apparel, of the U.S. International Trade Administration, say that between the first half of 2019 and the same period in 2020, Central American textile exports to the U.S. decreased by 34%, from $ 17,593 million to $ 11,553 million.
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.
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.
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.
In 2016 exports from the free zone regime fell by 4% compared to 2015, and those from companies covered under the maquila incentive law, fell by 6%.
The negative results in foreign sales of companies operating under one of the two incentive schemes is due in part to the departure of several companies from the free zone regime, having been affected by the Emergent Employment Act.
If the United States withdraws from the Transpacific Agreement, there will be less risk of competition from Asian countries for the Central American textile industry.
If the US does eventually abandon the Trans-Pacific Partnership Agreement (TPP), as promised by President-elect Donald Trump, the Central American textile industry could benefit from the elimination of the possibility that the US, its main market, will buy textiles from Vietnam at lower prices.Since the start of negotiations for the TPP, the Central American textile industry has tried to negotiate bilaterally with the US in order to minimize the negative effects that the TPP could have on the industry in the region.
A report by the Business Intelligence Unit at CentralAmericaData.com notes that in 2015 Central American countries imported $318 million worth of yarns, filaments and textiles, led by El Salvador with $157 million.
El Salvador was the main importer of synthetic filaments, strips and materials similar to synthetic textiles last year, according to data on the Textiles and Raw Materials Market compiled by the Business Intelligence Unit at CentralAmericaData.com.
High potential for online shopping in China has brought up opportunities for segments such as bathing suits, where 60% are imported products.
From a statement issued by PROCOMER:
Japan is one of the main entry points to the Asian region and is also a fashion leader, an industry worth approximately $110,000 million. According to a report by ProColombia, Japan imports more than 60% of its swimsuits and it was also found that consumers pay higher prices for these products, making it an attractive market to service.
After a big drop in 2009, sales abroad have seen a 17.6% increase in the first half of 2010.
According to information from Vestex, the Guatemalan association of textile and apparel manufacturers, in the first six months of this year the sector's exports totaled $705.2 million, 17.6% higher than the $599.6 million exported in the same period of 2009.
In April, Guatemala exported $82 million more textile goods than in the same period of 2009.
78.1% of them went to the United States, 17% to Central America and the rest to other countries such as Mexico and Canada.
Data from Vestex, the Textile and Apparel Commision, shows that apparel exports have been recovering sustainably since November 2009, after several years of negative growth.
After nine months of consecutive decreases, textile exports finally reversed the trend, increasing 2.48% in October.
In October, sales to the U.S. summed $102 million, 2.48% more than the same month of 2008, according to data from Vestex, the Textile and Apparel Commision.
Sigloxxi.com reports: "Alejandro Ceballos, Vestex President, says the increase is due to 'the start of a recovery process in the U.S.