Friday, December 08, 2017

Clothing sector recovers, but call for high alert of imports

Sao Paulo-the recovery of demand for clothing products should ensure expansion of 3.5% this year and 2.5% in 2018, boosting the increase in imports, also provides for the Brazilian Association of Textile and Clothing Industry (Abit).
"The current level in Exchange favors more imports than exports," said the President of the Association, Fernando Pimentel. The Abit designs a breakthrough of 10% of the volume of imports of clothing in 2018, to 1.012 billion pieces, after a 62% expansion this year.
He said macroeconomic factors such as reducing interest rates, increasing the generation of jobs and inflation under control will provide to the sector recover some of the losses of 2015 and 2016, when production receded, respectively, 5.7% and 1.7%.
However, much of the demand restored must be supplied for imported items, which Patel designs increased production in 2018 at a pace below 2017. "We must observe the back of imports by absorbing part of the domestic consumption," he explains.
Resume
In the textile business, which provides for industries such as automotive and furniture, for example, the projection of 4.8 percent advance in 2018, to 1,840,000 tons. As well as in garment, textile segment grew back this year, with an increase of 4.2% before 2016. The economic recession had brought down production in 2015 ( -18%) and 2016 ( -7%).
In a consolidated manner, the billing of the textile and clothing sector should achieve R $152 billion next year, representing an increase of 5.5% compared to R $144 billion expected for this year, according to Abit.
In the retail area, the demand recovery and the return of individual credit, leveraged by lower interest rates, will result in a total of 6.71 billion pieces this year sold to the final consumer, which means a growth of 6.5% on 2016. Already for the next year, the estimate is for an increase of 5%, to something close to 7.05 billion pieces to be traded in trade, whether domestic or imported items.
Investment
Before the heating of the production, the expectation is for an increase of investment. The contributions should add R $2.250 billion in 2018, high of 18.4% compared to the values applied this year, R $1.9 billion. Thus, the investments will resume 2015 levels, when they got in some R $2.240 billion.
"The important thing is the recovery of investment, which fell with the crisis", points out, stressing that Pimental ideally sector apply something between 4% and 7% of revenue in the renewal and modernisation of industrial parks. That would mean, according to him, funding between R and R $6 billion $7 billion, that is, well below what is estimated for next year.
In the Division of investments, about two-thirds going to the textile segment and the remainder, for clothing.
The Executive considers that, within this calculation, include expenditures on intangible assets, such as those invested by the industries to develop, for example, of design and fashion of parts produced by industry.
The improvement of the prospects of the industry already is reflected in the textile and clothing sector job, which registers up to October this year a net balance of 29500 vacancies, after the loss of 151,000 jobs between 2014 and 2016. However, for the closure of this year, the expectation of Abit is to achieve a positive balance of 3500 posts, porch that is expected to rise to 20000 in 2018.
Inputs
One of the main costs of this industry is cotton, whose price pressure should be less in 2018, says Pimentel, the prospect of a bumper crop with good harvest, raising the supply of fiber.
"We don't foresee any problems with the amount to meet the demand of consumption," he says. Already among the fibers derived from petroleum, used in the production of parts, the main variable to be monitored will be the exchange rate.
DCI - 08/12/2017
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