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Exports of textiles and shoes with the biggest drop since the pandemic, 75 thousand jobs at risk

2023-11-18 08:24:18Biznes SHKRUAR NGA REDAKSIA VOX

Exports have continued their downward trend in October, although the contractionary trends have slowed as a result of the better performance of sales of "minerals, fuels and energy" as well as "construction materials and metals".

On the contrary, October was not good especially for the "textiles and footwear" industry, as well as for the automotive industry (machinery and equipment) and "food, beverages and tobacco".

According to INSTAT, in September-October 2023, exports of goods reached the value of 36.5 billion ALL, decreasing by -4.3%, compared to the same period a year ago.

Since March, exports have failed to recover, marking the worst performance since the pandemic period. In January, sales abroad expanded by 20.2% on an annual basis, while in February they expanded by only 2.8%. The decline started in March, with 11.7%, deepened in April with 19.3% and followed the negative trend in May with -11.7%. In June the contraction deepened again to 17.3%, to slow down in July to -4%, jumping in August with -21.9% to continue in September with -12.8%. In October, the contraction slowed to 4.3%.

The textile and footwear industry had the most negative effect on the October decline

According to INSTAT, during the month of October 2023, the reduction of exports by -4.3% was influenced by the groups: "Textiles and shoes" with -3.6 percentage points, "Machinery, equipment and spare parts" with -0.8 points percentage, "Wood and paper products" with -0.8 percentage points, etc. While the following groups have had a positive impact: "Minerals, fuels, electricity" with +1.0 percentage points, "Construction materials and metals" with +0.5 percentage points and "Chemical and plastic products" with +0.4 percentage points ..

Exports, during this ten-month period, decreased by -8.6%, compared to a year ago. The groups that have negatively affected the annual decrease in exports are: "Construction materials and metals" with -6.4 percentage points, "Minerals, fuels, electricity" with -1.2 percentage points, "Textiles and shoes" with -1.2 percentage points, etc. While the groups: "Food, drinks, tobacco" with +1.3 percentage points and "Machinery, equipment and spare parts" with +0.3 percentage points have had a positive impact.

Fashion shortens the lines, the closing of factories and the loss of jobs are at risk

The textile and footwear industry, which works with custom material (fason) and is one of the largest employers in the country (mainly of low-income groups), is in a difficult situation. For the fifth month in a row, exports of textiles and shoes have followed the shrinking trend. In October, this group shrank by 11.4%, the steepest decline since the pandemic period, when factories shut down due to problems created in the global economy by pandemic restrictions.

Exporters have constantly complained to the Bank of Albania and the Ministry of Finance about the consequences of the strong depreciation of the euro, which is currently exchanged at around 104-105 ALL, from 118 ALL, which was the average of 2022, on their activity.

For the whole 10 months, the exports of this group have decreased by 4.4%. Textiles and footwear are the largest export group in the country, with about 29% of the total.

Minerals and fuels return to growth

"Minerals and fuels" returned to growth of 6.2% in October, after a deep decline of 27.5% in September. The performance of this group's exports depends on energy as well as the number of ships that Bankers Petroleum, the country's largest oil producer, manages to send in a month, as well as energy exports. For the 10-month period, the group recorded a contraction of 5%, from 6.8% for the 9-month period.

Building materials and metals inhibit shrinkage

Construction materials and metals significantly slowed down the decline in September (-8.6%), after having contracted at high double-digit rates throughout the 8 months of this year. In October, the group returned to growth for the first time this year, albeit at a low rate, of 2.8%. According to sources from Kurum, one of the largest exporters in the country, the trend is related to several factors, such as the price trend, but also the progress of demand. For the 10-month period, this group shrank by 28%, giving the most negative impact on the performance of exports.

Foods, drinks and tobacco are not recovering

"Food, beverages and tobacco" was the sector with the most stable performance of exports this year. In July, this group increased its exports by almost 20%. However, in August, this group recorded a relatively strong decline of 9.7% on an annual basis, as a result of unfavorable weather that affected the reduction of production. The downward trend worsened further in September, with nearly 14% contraction in products sold, the most negative performance this year. In October, exports continued to decline, albeit at a slower rate of -0.5%. However, for the 10-month period, this group has expanded by 12.5%, influenced by the positive performance in the first part of the year.

The automotive industry continues to decline

Exports of machinery, equipment, spare parts were until March the group that was marking the best performance of exports as a result of the expansion of factories working in the automotive support industry. But, since April, this group has been showing negative progress, except for the month of May. The contraction continued in October, with 8.5%, the second highest drop after textiles. According to company representatives, the negative performance is related to the consequences that the devaluation of the euro is having on the activity of factories that produce or assemble spare parts for the automotive industry. On the other hand, the constant increase in costs is making the industry less competitive. For the 10-month period, the group has increased by about 3.25%.

 

 


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