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"Made in Albania" shoes plummeted, the drop in exports in January 30 percent

2024-02-22 11:22:48Biznes SHKRUAR NGA REDAKSIA VOX

"Made in Albania" shoes plummeted, the drop in exports in January 30

The textile and footwear industry that was the mainstay of exports in the last two decades is dying out. The multiple crisis that has hit the sector in the last two years culminated in the last months where the factories could not cope with the under-price of the euro and the drop in demand from abroad.

Data on foreign trade showed that in January 2024 exports of textiles and footwear decreased by 18.5% in value. The decline was much sharper for footwear, whose exports fell by 30 percent compared to January 2023, while textile exports fell by 7.8 percent in value.

Exports of the textile and footwear industry were 88 million euros in the first month of this year from 108 million euros in January 2023. Clothing and footwear are the largest group of exports, accounting for 31 percent of the total even in January 2024.

Manufacturers are not optimistic about the situation. Eva Laro, who runs the "Prodyn" shoe manufacturing plant, tells Monitor that the sector is actually in crisis and there is a significant drop in orders from abroad. She said no improvement in orders is expected before September 2024.

Skender Pashaj, who owns the "Fital" shoe production factory, has previously stated that, previous crises have shown that, when consumers are affected by inflation, the contraction of consumption affects the shoe too much. The inhibition of orders started in the last months of 2022 and continued throughout 2023 and January 2024, making business projections for recovery difficult, he says.

Zori Edvin Prençe, who heads the Proeksport association and owns a shoe production line, says that by the end of spring 2024 the situation will be similar and many job cuts and loss of current contracts are expected and there are no good premises for contracts/ new customers.

This time the crisis in the fashion sector has many sources, where in addition to the drop in demand from abroad, the devaluation of the euro in the exchange rate and the increase in the minimum wage have made our factories not very competitive. Many factories lost customers last year, which transferred production to other countries in Asia and India.

Clothing and footwear manufacturers expect sales, employment and investment to decline in 2024 as well due to exchange rate weakness, declining foreign demand and high labor costs. Factories announce job cuts of 20-30 percent this year, as recovery expectations are clouded.


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