Textiles warn that the China-US trade war will have an impact on the Argentine industry

The report details "In the first place, the brake at the entrance of Chinese production in the United States may result in trade diversions to other destinations, which could mean for our country the entrance of clothing to liquidation price ".

He adds that "the devaluation of the yuan means a further reduction of the Asian commodity. Indeed, the real exchange rate with China was virtually unchanged in July 2019 compared to July 2018, despite the sharp devaluation suffered by the Argentine peso during this period. "

The chamber explained that the government "has the key in his hands not to damage the national production. It would be enough to put in place an active foreign trade administration policy, similar to that which currently exists in the United States and several European countries. "

The situation would worsen the difficult economic context in the clothing textile value chain.

According to INDEC statistics, since the second quarter of 2016, clothing production in Argentina has seen an uninterrupted decline. In June 2019, the quantities manufactured were 12% lower than in June 2018. This phenomenon was also accompanied by a drop of 18.5% in the national textile production.

The Chamber noted that "the continuing decline in national clothing production has resulted in job losses".

The latest statistics published by the Ministry of Production and Labor show that Loss of 5,152 jobs in the sector between the fourth quarter of 2017 and the fourth quarter of 2018, a decrease of 11.8%. In the last quarter of 2018, the garment manufacturing sector generated 38,610 registered salaried jobs, a decrease of 21.7% from 49,339 in the last quarter of 2015. The loss of jobs during last three years was 10,729, according to the ministry.

The contraction in the dynamics of production and employment in the sector is mainly due to the reduction of clothing consumption. CAME reported that clothing sales in retail stores fell 6.1% in July compared to the same month last year. Compared to June, sales resumed thanks to the seasonal effect of the Christmas bonus and the revival of the Now 12 program. The positive news is the recovery of consumer confidence, which has improved from 21.9% in July 2019 compared to the measure. July 2018, according to Di Tella University.

For its part, Sales of clothing, footwear and leather goods in the shopping centers of Greater Buenos Aires decreased by 6.3% in May, according to the latest statistics available at INDEC. During the same period, sales of clothing and textile products in the country's supermarkets decreased by 8.5%. This momentum has occurred despite the fact that clothing prices have clearly exceeded the general level of inflation (43.1% vs. 54.7%).

"As reported in previous editions of Traffic Light, the loss of purchasing power of the majority of the Argentine population is mainly behind the decline in sales and production of clothing"concluded the report.