Garment exports dip 3% in Q1

Garment exports dropped by nearly three percent to $694.18 million in the first quarter of the year from $714.741 million in the same period a year ago, Garments and Textile Export Board (GTEB) executive director Serafin Juliano reported yesterday.

The overall drop was attributed to low export volume to the US which remains the industry’s biggest market, accounting for 74.1 percent of the garments sector’s export pie.

Stiff competition from garments companies in Mexico, China, and the US’s continued safeguard measures in anticipation of the end of the quota regime contributed to the decline.

The GTEB had expected garments exports to surge this month as the peak buying season starts.

Exports to European countries in the first quarter managed to grow by 24.14 percent to $106.323 million from the comparable amount of $85.646 million in the first quarter of 2003.

But the growth in European demand was not able to compensate for the 8.5- percent decline in shipments to the US.

Exports to the US amounted to only $486.58 million in the first quarter of this year compared to the $529.728 million posted in the first quarter of 2003.

Even exports to Canada, which grew 2.38 percent, was not able to wipe out the US decline.

Exports to Canada from January to March this year reached $16.8861 million, up 2.38 percent from the $16.468 million recorded in the same period a year ago.

Juliano had earlier expressed optimism that the garments sector would recover in 2005 with a growth of 15 percent. In dollar value, even though the sector is likely to register a flat growth this year.

However, in achieving the 15-percent growth in 2005, Juliano warned that the garments industry would have to undergo some consolidation and even possible closures just to be able to maintain its dollar business.

The projected flat growth this year of the garments sector is due to the non-availability of the carry-over provision of the garments quota.

The quota allocation system is set to expire this year and local garments manufacturers would face stiff global competition.