Tirana Times
TIRANA, Sep. 21 – Albania’s manufacturing industry, mainly textile and footwear companies whose products are mainly exported to Italy and Greece, has overcome the crisis in 2009 and in the first quarter of this year, registering significant growth. This is confirmed by the latest Institute of Statistics (INSTAT) data which show the textile and shoe exports during the first seven months of this year increased to 33.3 billion lek compared to 28.8 billion (280 mln dollars) during the same period last year, registering a 14 percent growth year-on-year.
This group which leads Albanian exports were worth 5.5 billion lek in July 2010, up from 4.76 billion lek in July 2009.
Albania’s second biggest exports in the January-July period were “minerals, fuel and electricity,” accounting for 28.5 billion people, almost three times higher compared with last year.
Considerable growth was also registered in the “construction materials and metal” exports whose exports grew to 18 billion lek during the first seven months of this year, up 11 billion lek compared to last year, according to INSTAT’s foreign trade balance sheet data. However, representatives of the National Chamber of Garment Producers describe the export increase as normal at this time of year because of the new season. Italy continues remaining Albania’s main destination in the textile and shoe exports in the first seven months of this year with 27.8 billion lek or around 70 percent of the total, followed by Germany with 2 billion lek and Greece with 1.7 billion lek. More than half of manufacturing businesses operating in Albania declared lower sales and profits in 2009, a recent study conducted by Albanian Center for International Trade (ACIT) has shown.
Some 57 percent of surveyed companies manufacturing for export said their sales registered a considerable drop in 2009 and in the first quarter of this year.
Falling demand in foreign markets, the increase in manufacturing costs and breach of contracts by foreign partners were the main factors contributing to the poor performance of these manufacturing businesses in 2009.
ACIT said the survey was intentionally focused on the manufacturing sector, which is vital for the Albanian economy and exports with an estimated 80,000 employees. Some 77 manufacturing businesses in the country’s three main cities of Tirana, Korca and Shkodra as well as 225 employees were interviewed. However, the companies’ expectations for 2010 are better considering efforts to find new markets and improve the quality of products.
Manufacturing companies said government could help them by promoting their products in international markets, support them with loans and lower the tax burden. The difficult situation of the manufacturing companies also affected the employees of this sector. Some 24 percent of the surveyed workers said their personal income had decreased by an average of 18 percent last year.
Employees also complained about the rising cost of living because of higher electricity, water and healthcare bills. “Among measures that individuals took to handle the crisis were the decrease of daily expenses, buying on credit, borrowing from relatives and getting consumer loans,” said the report.
The Albanian Centre for International Trade (ACIT), an NGO specialized in foreign trade analysis, warned that the decrease in exports by 8 percent last year shows Albania could be losing ground in the competitive advantage of the main exporting sectors such as shoes whose export fell by 5 percent. Last year’s drop of exports was attributed to the global financial crisis and especially the situation in Italy and Greece where most Albanian products are exported. USAID Mission Director in Albania, Joseph Williams, said the decrease in exports stresses the immediate need to improve the competitiveness of Albanian products in domestic and foreign markets. Albania’s manufacturing industry has recently made a list of requests, complaining about delays in VAT reimbursement, payment of taxes on imported machinery as well as the social and health contribution system for employees.
Meanwhile, government has made available a 10 million euro fund to support businesses which can generate employment in a short-term period.
Government officials say Albania is first in Europe for the lowest tax burden on foreign direct investment, and the lowest minimum wage at 18,000 lek (170 dollars per month) as well as the youngest population in Europe with an average age of 31 years.
