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Growth in garment manufacturing sector falls drastically in Q3
04
Nov '08
According to data released by the Central Statistics Agency (BPS), the manufacturing sector is witnessing a slowdown, more particularly noticeable in garments and machinery. The manufacturing sector was able to post a meager 1.6 percent growth in the third quarter of 2008 in comparison to the same period of last year.

This nominal growth came on the back of a slow growth of 5.85 percent and 3.3 percent recorded in the first and second quarter respectively. The worst hit is the one of the biggest export revenue generator; the garment sector. Production dropped by a whooping 30.61 percent in the third quarter, compared to the same period of 2007.

The BPS report contradicted statements made earlier by the Industry and Trade Ministry which had projected the manufacturing sector to grow from 3.85 percent in the second quarter to 4 percent in the third quarter.

Growth in manufacturing of machinery and equipments also saw a drop of 17.3 percent while chemical and chemical based industries fell by 12.96 percent in the period under review. Experts attribute the slow growth to sluggish exports. According to them the economic crisis has pushed the countries of US, EU and other countries in a recessionary mode, which has played a major role for the fall in growth.

For instance, textile and garment exports fell by US $30.2 million in September alone. Indonesia has targeted an export turnover of $11 billion in the current year. Considering that it had reached $5.11 billion in the first half of 2008, it was very likely that the country would have achieved its target.

But experts say achieving the targets now looks bleak since it exports nearly 33 percent of all exports from the textile and garment industry to the US which is the epicenter or ground zero of the global crisis. They say the real effects of the recession will be actually felt in the fourth quarter of 2008 and expect the situation to spillover to a major portion of 2009 too.

Fibre2fashion News Desk - India


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