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Monday, 27 December 2010 00:34 - - {{hitsCtrl.values.hits}}

Despite the positive export numbers for apparel in October the industry has moderate expectations for the coming year because the global economy remains volatile, industry leaders said.

According to Central Bank data October exports beat imports for the first time since December 2009. Exports in October grew by 27.6% to a third highest ever monthly figure of $ 802 million.

Imports on the other hand grew by only 8.4% to $ 1.13 billion. The strongest contribution came from higher export earnings from the textile and garments and minor agricultural crops earnings from garment exports to the EU and USA increased by 27.4% and 33.1%, respectively, in October 2010.

But celebrations might be premature says Joint Apparel Associations Federation (JAAF) Secretary General Rohan Masakorala.

“We were pleasantly surprised by the export numbers. It is very encouraging since we started the year on a slow note. The October numbers have made us equal to the 2009 statistics and if this growth continues then we are hopeful of breaking even or posting stronger exports by the year end,” he said.

However Masakorala was quick to sound a cautionary note pointing out that the main markets of EU and US remain tenuous and consistency could be a problem.

“There is potential for growth next year but we don’t want be too optimistic,” he said adding that problems in Bangladesh and rising labour costs in China had given Sri Lanka an edge. Insisting that it was difficult to put growth in numbers, he nonetheless ventured a 5%-8% growth as satisfactory. “The Budget has outlined all the proposals that we presented to increase our speed of delivery and convert Sri Lanka into an apparel hub so the industry is optimistic that it will have the chance to become a US$4-5 billion industry. These proposals are in line with JAAF’s five year strategy.

Commenting on the export processing zone union demands to increase salaries by 30% in 2011 the Secretary General insisted that garment factories would pay the amount if regulations required it but emphasised that it should be based on demand and supply. “Companies increase salaries according to their capability and there has already been a 20% wage increase for minimum salaries this year. Salary hikes cannot happen randomly, there must be a mechanism to ensure that it happens in a sustainable manner.”

Thanks to strong growth in exports, first 10 months performance reflected a growth of 13.2% to $ 6.5 billion. Since July cumulative exports growth has been hovering around 11 to 10% whilst in the first half cumulative exports were up 13.7%.