"Textile-clothing threw in the towel on cheap products" 9 July 2024

Turkey's high cost compared to rival countries, the recession...election campaigns in target countries and the ongoing war environment led to a deepening of the export decline in the ready-made clothing sector as of June.

The sector, which lost 21.3 percent in foreign sales in June, lost its third place in the ranking of the highest exporting sectors to the steel sector after a long break. Stating that orders continue to go to competitors due to the price difference despite the increase in order appetite in target countries, sector representatives explained that the expected increase in exports has been postponed...due to the ongoing pressure on the exchange rate...

The ready-made clothing sector...has been losing blood for a long time...more than 2 thousand companies have closed down in the last year and employment loss has peaked. According to the latest data published by the Social Security Institution for April 2024, the total number of companies in the sector decreased from 42,434 to 40,214 in a one-year period, while employment decreased from 673,000 to 600,000. When considered together with textiles, the total employment loss exceeded 200,000 and total employment fell below the 1 million mark for the first time since 2020, reaching 993,000...

According to the Istanbul Chamber of Industry PMI data, new orders slowed down for the first time in the last three months and signaled a weakness in demand. While production started to contract again in the last month of the second quarter, employment and purchasing activities also decreased. The negative picture that has been continuing for more than a year has necessitated a transformation in the ready-made clothing sector, as in many other areas..

TOBB Ready-Made Clothing and Apparel Sector Assembly President Şeref Fayat...said, “Turkey...has become very expensive. The difference that used to be 30-40 percent has now reached 50-60 percent. Our price difference with Egypt is 30 percent, with Bangladesh 50 percent and with Vietnam 60 percent… We hear strange prices.....” Fayat, who drew attention to the fact that despite the 110-120 percent increase in input costs excluding energy in the last 12 months, the exchange rate has only increased by 27 percent, continued as follows: “We cannot get any business, and even if we do, we are losing money. As a result...bankruptcy and loss of employment are coming one after the other and will continue to do so. It is a difficult process...”...

[Translation via Google Translate]