While exports for the first seven months of this year have registered a 3.4 percent increase, imports were down by 1.8 percent
TIRANA, Sept. 5 – The garment and footwear sector, one of the top employers and exporters in the past few years, continues suffering crisis impacts as demand from top EU partners falls. INSTAT data show textile and footwear exports failed to recover, shrinking by 5 percent to 37.5 billion lek for the first seven months of this year.
The garment and footwear industry accounts for 32 percent of total exports and employs around 70,000 people. What producers mostly fear is a deterioration of situation in Italy which is the destination for the overwhelming majority for 88 percent of Albanian garment and footwear exports. The poor demand could mostly hit small enterprises with little investments specialized in only one cycle of work. Only 10 percent of the companies are reported to be able to carry a full cycle of works.
Diversification of markets, considering that the majority 80 percent of these products go to Italy and the remaining share mainly to Germany and Greece is another concern for textile producers. Starting from next January garment and footwear producers will face extra labour costs as minimum monthly wages increase by 5 percent to 21,000 lek.
The construction sector and metals are also suffering. Exports of construction materials and metals dropped by 11.2 percent year-on-year in the first seven months of this year.
Minerals, fuel and electricity now top the export list with around 40 billion lek, registering a 21 percent increase compared to Jan-July 2011.
While exports for the first seven months of this year have registered a 3.4 percent increase, imports continue underperforming unveiling the poor domestic consumption as shown by the performance of VAT and excise taxes and retail sales. A net importer, Albania imported 296.7 billion lek in Jan-July 2012, down 1.8 percent compared to the same period last year. Data show a sharp 27 percent cut in imports of construction materials and metals as the construction sector remains in crisis. Imports of machinery, equipment and spare parts dropped by 4 percent to 36.5 billion lek, confirming the hesitation of businesses to make new investments as consumer demand remains poor.
Exports to top trade partner Italy, the destination of more than half of Albanian exports, have also been affected by the crisis there. Exports to Italy in the first seven months of this year rose by a mere 3 percent to 63 billion lek, accounting for 54 percent of the total exports. Meanwhile, exports to Greece, the country’s second most important trade partner remained almost unchanged at around 6 billion lek, accounting for only a 5 percent share. Greece is the second most important partner for imports with trade exchanges accounting for 12.5 percent of the total.
Spain surprisingly ranks the second most important destination of exports with around 10 billion lek followed by Kosovo with 8.5 billion lek. As far as imports are concerned Italy tops the list with 92 billion lek, 31 percent of the total, followed by Greece with 30 billion lek, or 10 percent of the total.
Albanian exports to neighbouring Kosovo have registered a 21 percent increase to 8.5 billion lek, despite a temporary ban imposed on Albanian cement last July.
