Covid-19 briefing

The global apparel market is now forecast (post-Covid-19) to grow at a CAGR of 1.5% from 2019 to 2023 to reach US$2.110bn by 2023.

The growth is lower compared to 4.4% CAGR at which the apparel sales were estimated to grow during 2019-2023, prior to the pandemic.

The apparel market lost US$443bn expected sales in 2020 due to the impact of pandemic-related disruptions.

The Covid-induced lockdowns, store closures, travel bans, supply disruptions and fear of contracting the virus during shopping trips had a profound impact on consumer buying behavior - many lost their appetite for non-essential items, and the same is being reflected in the drop in growth forecasts over the next three years. However, the online channel is set to compensate for some of the lost sales as customers are increasingly preferring online purchases amid virus fears.

Cambodia unions and factory associations have concerns over pandemic-driven shortages, but the garment, footwear and travel goods sector will see their 2022 minimum wage increase by US$2 a month to $194, after a vote from the Cambodia National Minimum Wage Council in September.

Factory representatives recommended a decrease in minimum wage to $188, while unions aimed for $204, and the government chose no increase.

After the vote, Cambodia’s long-serving Prime Minister Hun Sen ordered a $2 increase for full time workers, while minimum workplace benefits remain the same.

Kaing Monika, deputy secretary general for the Garment Manufacturers Association in Cambodia, said factories throughout Cambodia were not ready post-pandemic to handle a minimum wage increase.

“Any increase would to some extent have a negative impact on the sector, from the perspective of the global crisis we are undergoing and the need for Cambodia’s economic recovery,” he told Just Style.

More than 20,000 garment workers in Lao PDR affected by the Covid-19 pandemic have benefited from emergency income support worth about US$1.8m.

The 20,698 garment workers from 47 garment factories each benefited from one-time cash transfers of LAK900,000 ($85) from March to October 2021 to help mitigate workers' lost income and support business continuity while reducing employers' staff turnover costs.

The German Federal Ministry for Economic Cooperation and Development (BMZ) funded the initiative, which was developed with technical support from the International Labour Organization (ILO).

The Romanian apparel industry was badly hit by the pandemic with supplies of raw materials from China and exports to Italy disrupted. The pandemic is also choking off labour supplies, which were already a problem for this near-sourcing hub. The government and its apparel sector's efforts to revive production and sales have yet to find success.

“The textile [and apparel] sector has not recovered to pre-Covid-19 levels. Many of the employees of the closed factories have not found another related job in the sector and were forced to re-qualify for other positions in other industries,” Diana Iliescu, a project director at Bucharest-based Lara Consulting, which advises companies on how to source European Union (EU) and Romanian government financing, told Just Style.

She added that no less than “750 factories in the textile industry have disappeared from statistics in Romania” since the start of the pandemic, and that industry workers continue to face low, halved or, a complete lack of any salary.