The Chamber of Garment Producers says textile companies have already started cutting jobs after exports dropped by 20 to 30 percent in the first quarter of this year
TIRANA, April 9 – Albania’s garment and footwear producers have warned 2012 will be a tough year for the country’s biggest exporting industry following lower demand from crisis-hit Italy and Greece, Albania’s top trade partners. The Chamber of Garment Producers says textile companies have already started cutting jobs after exports dropped by 20 to 30 percent in the first quarter of this year.
“Orders for the new season have considerably dropped and as a result, even exports will continue recording negative rates. We are facing a new phenomenon from our partners who are demanding small quantities and want them very quickly. The Italian partners are reducing demand because of falling sales in international markets,” said the Association after a recent meeting.
Facing renewed risks from the global crisis, garment producers want government to review minimum wages in order to make the sector more competitive, establish on-line communication with state institutions and reduce quick and often unnecessarily routine inspections.
The Association says making new investments in the industry has become a real problem because of access to loans becoming more difficult and bureaucracy by the state administration.
According to the Garment Association statistics, there are around 200 clothing manufacturing companies of different sizes operating in Albania. INSTAT data show this is one of the sectors that has created the greatest number of jobs (excluding the agriculture sector), with 27 percent of the work force employed in processing enterprises working in clothing production.
Detailed INSTAT data show the fa谮 industry, producing garment and footwear products with imported raw material, continued remaining the top export performer in 2011 also thanks to Arab spring turmoil and the removal of customs fees.
Known as the fa谮 industry, the garment and footwear industry were the country’s top exporter for 2011 with exports rising by 15 percent to around 64 billion lek (Euro 450 million). More than 80 percent of Albania’s total garment and footwear products go to Italy and the remaining minority share mainly to Greece and Germany.
Latest official data published by INSTAT show textile and footwear exports for the first two months of this year dropped by 4 percent to around 10 billion lek.
In Sept 2011, Parliament decided to lift the 10 percent customs duties for imports of clothing and the footwear industry, in a move which is also expected to lower prices of these products in domestic markets and attract more foreign investors.
Government officials say Albania is first in Europe for the lowest tax burden on foreign direct investment, and has the lowest minimum wage at 20,000 lek (200 dollars per month) as well as the youngest population in Europe with an average age of 31 years.
