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The textile industry denounces that 1,000 jobs have already been lost and suspensions are increasing - Infobae
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La industria textil denuncia que ya se perdieron 1.000 puestos y se incrementan las suspensiones
Según la Fundación ProTejer, la caída de ventas en el mercado interno está afectando fuertemente el empleo, las inversiones y la cadena de pagos
www.infobae.com
May 28, 2024
According to the ProTejer Foundation, the drop in sales in the domestic market is strongly affecting employment, investments and the payment chain.
The textile and clothing chain generates 540 thousand jobs (EFE)
Sales in the textile industry fell 36% year-on-year on average during the second two months of the year, which led to a drop in production and employment. Layoffs in the area amount to 1,000 workers, industry sources told Infobae .
According to a survey by the ProTejer Foundation , 42% of companies claim that employment has decreased since December and within these, the contraction was 14% on average. In the clothing sector, the number of layoffs would double that of the textile area, sources said.
In the first four months of 2024, 64% of the companies surveyed took measures that negatively affected employment: cancellation of overtime, layoffs, suspensions, early vacations and non-renewal of contracts, among others. According to the president of the Foundation, Luciano Galfione , the suspensions affect around 5,000 workers.
Variation in jobs between December 2023 and April in the textile industry (ProTejer)
This figure reflects a worrying situation, especially when compared to the first two months of the year, when only 21% registered fewer jobs than last December.
It should be noted that the textile and clothing chain generates 540,000 jobs and, therefore, supports 2 million people throughout the country.
In the second quarter of the year, most companies took measures that affect employment (ProTejer)
“The results indicate that the contraction of the sector's activity deepened compared to the previous two months, with warning signs of impact on employment and possible closure of productive establishments if high levels of idle capacity continue. This crisis is having a widespread impact on all areas of the value chain: from the manufacture of yarns, fabrics, clothing and the marketing of machines, inputs and final goods,” the Foundation report stated.
Among the main numbers surveyed, it stands out that 88% of companies saw their sales to the domestic market reduced between March and April with an average drop of around -36% year-on-year. Consequently, around 80% of those surveyed lowered their production, showing an average drop of -37% and a drop in the use of installed capacity that averaged -29 percentage points.
Between March and April, sales to the domestic market fell 36% year-on-year on average
In this way, the decline in textile and clothing activity deepened compared to the first two months of the year, when 70% of companies had reduced their activity.
The main reason that companies identify as causing the drop in production is the loss of purchasing power of the population (86% of those surveyed), while 34% indicate that the reason is macroeconomic expectations and climate change of business regarding the future.
Likewise, the variation in costs of raw materials and inputs, the greater participation of imported goods in consumption, the exchange appreciation and the change in sectoral policies for the industry were highlighted.
An important source in the sector assured infobae that “historically, the textile sector anticipates the rest of the economy. It is still in decline. I don't see any reason for it to grow. Many postponed the moment of saying goodbye. But they will not be able to postpone it any longer because with the increase in salaries due to the simple passage of time, dismissal becomes more expensive. Without having the possibility of raising prices due to the crisis.”
“High levels of idle capacity affect the planning of new investments. In contrast to the investment record in previous years, by 2024 87% of the companies surveyed will not make investments, some of them even canceled planned investments,” they stated from ProTejer.
Regarding exports, 28% of those surveyed exported in the last 5 years and in 2024, 35% of companies plan to do so. However, 72% consider that there are difficulties such as the exchange rate (68% of companies), tax pressure (58%), national bureaucratic obstacles (40%) and macroeconomic volatility (29%).
88% of companies saw their sales to the domestic market reduced between March and April
On the other hand, 35% already stated that they have difficulties in meeting current payments (taxes, fees, suppliers, salaries). At the level of commercial debt for imports, 54% of companies that have difficulties meeting current expenses have debt for imports. However, only 11% of the total debt holder subscribed to BOPREAL to cancel it.
“The industrial contraction not only affects the textile and clothing industry, but is occurring across the board in all industrial sectors. Many move through activity levels in historic apartments. In this context, more than ever, we consider it essential and urgent that Argentine industry once again regain a central place on the economic agenda,” stated the Foundation.
“Agriculture, mining, gas and oil alone (sectors 'chosen' by Milei) are not enough to lift 60% of the population out of poverty and provide economic support to 47 million people,” he said.
“It must be remembered that the manufacturing industry directly and registered employs more than 1.2 million people (and indirectly 3 million more people), while the 'selected' sectors reach 421 thousand registered workers. Only the textile, clothing and footwear industry exceeds all the registered jobs in mining, gas and oil extraction (including refining), ”he added.
“Reversing the complex situation that the manufacturing industry is going through, designing a macroeconomy aligned with production and carrying out comprehensive policies that improve its competitiveness should be a priority to prevent the loss of those productive capacities that took many decades to build and the serious social impact associated with dismantling of the national industrial fabric: without industry there is no work for everyone,” he concluded.
