During the first weeks of 2021, interest in children's clothing measured by online searches and mentions in conversations in the digital environment, increased in Panama and Guatemala, and decreased in the case of the other markets in the region.
Through a system that monitors in real time changes in consumer interests and preferences in Central American countries, developed by CentralAmericaData, it is possible to project short and long term demand trends for the different products, services, sectors and markets operating in the region.
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.
After the demand for clothing fell in the world's main markets due to the health crisis, Salvadoran entrepreneurs are confident that in the coming months it is possible to recover part of the sales initially projected for this year.
The social distancing decreed due to the covid-19 outbreak caused consumer preferences to change in the main markets, as the demand for comfortable clothing to be at home has now rebounded.
Uncertainty over a possible second wave of covid-19 cases globally will prevent Salvadoran textile industry exports from recovering for the rest of 2020.
Official data show that from January to May 2020, El Salvador's exports in the textile and clothing sector amounted to $619 million, an amount that is 42% lower than the $1,072 million registered in the same period in 2019.
Considerable investments in the digitalization of operations, the closure of small stores and the expansion of the commercial area of the best located sales points, is part of the strategy that companies are beginning to implement in the new context of business transformation.
Managers of large corporations agree that several companies were already making progress in digitizing sales and operations, but the pandemic ended up persuading decision makers of the need to focus on online sales, and simultaneously accompany it with a plan to transform physical stores.
For the time that the State of Emergency is in effect, the authorities ordered the paralysis of the activities of the production plant of the company ADOC, located in Montecarmelo, Soyapango.
On May 14, the company faced an inspection by the Ministry of Labor, in which seven inspectors, escorted by agents of the National Civil Police, a contingent of soldiers from the Armed Forces and reporters, demanded to verify the working conditions in the production of supplies for the emergency, the company reported.
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.
The "Information System for the Impact Analysis of Covid-19 on Business", developed by the Trade Intelligence Unit of CentralAmericaData, measures the degree of impact that the crisis will have on companies according to their sector or economic activity, during the coming months.
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.
Businessmen from the textile sector of El Salvador foresee that the entry into force of the agreement will increase opportunities to attract new investment from the Asian country.
The textile workers believe that the opportunities will not only be to export to the Asian country, since it is also possible to attract investment for the sector, because Korean companies have a large amount of raw material.
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.
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.
Because of the demands of the brands, companies producing synthetic yarns in El Salvador have been replacing virgin polyester by recycled plastic in the manufacture of their products.
Representatives of Unifi Central America, one of the companies producing synthetic yarns in the country, assure that 40% of recycled raw material and 60% of virgin plastic resin are currently used.
In the first nine months of the year, imports of yarns and textile inputs in Central America totaled $349 million, registering a 14% drop over the same period in 2017.
Figures from the Trade Intelligence Unit at CentralAmericaData: [GRAFICA caption="Click to interact with graphics]
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.
From May 14 to 16 in Guatemala, textile exporters from the region will meet with international buyers at Apparel Sourcing Show, to explore business opportunities.
The objective of the event is to allow all members of the Central American industry value chain to expose their capabilities to buyers and promote the integration of the supply chain.
The growth in demand for sportswear, which has been a trend in several international markets, is forcing companies in El Salvador to modify their production processes.
Local manufacturers have identified that pants, leggings, biker shorts and other sportswear have become an urban fashion in different countries, which has led them to adapt their production processes to meet the growing demand.