E fundit!

13:08 TODAY

Murder of the officer/ Enea Mekolli's uncle raises accusations: They were without any kind of protection

The uncle of the murdered officer, Enea Mekolli, Hazbi Mek...

Industry plummets 8.9% in T II, historic record

2024-11-01 07:38:00, Ekonomi CNA

Industry plummets 8.9% in T II, ??historic record

The industry sector recorded an annual decline of 8.91% in the second quarter of 2024, the largest since the second quarter of 2020, when restrictions on movement from the Covid-19 pandemic were applied.

INSTAT data show that the reason for this decline is the crisis in the processing industry. This branch of industry suffered an annual decline of -7.6% in the second quarter. The decline continued for the sixth consecutive quarter, making this crisis the most unprecedented in the entire history of the transition.

As the data of the graph below shows, the sector of the processing industry, which is mainly dominated by textile and shoe factories, last year suffered a decline of - 6.1%, twice as much as the year of the pandemic crisis 2020. While this year the decline is expected to be even more deep. In the first 6 months, the annual decrease is about 8.3 percent, as the factories seem not to be optimistic about the situation changing.

The lack of employees, the increase in labor costs, losses from the exchange rate, but above all the drop in demand from abroad, are deepening the losses from month to month. Last year, textile exports in value reached 126 billion ALL, with a decrease of about 6.5%, while in the 9th month of 2023, the decline deepened by about 12%.

Skënder Pashaj, who runs the company "Fital", one of the largest shoe manufacturers, claims that apart from the difficult situation there is no hope for recovery. The increase in living costs after the war in Ukraine, in many European countries with which our country exports, has reduced the demand for clothing and shoes.

Global sportswear giant Nike announced that in 2024, global retail sales will decline by 10%, against their expectations for growth. While the shoe market has been in crisis for two years, Albanian factories are also suffering in the same situation and for the same reasons in the last year.

Spring fashion fairs faced steep declines in orders as hopes for a recovery have dimmed. Data from the balance sheets of large companies show that the number of employees, in most of them, has been cut by more than 35% in 2023.

If the market situation changes, factories find it very difficult to bring back workers, as they have been integrated into other sectors. The factory crisis seems to have become permanent for many reasons, some of which stem from the domestic market.

The fall of the Euro in recent years has systematically reduced the profits of factories, and on the other hand, the increase of the minimum wage from 30,000 Lek in April 2022 to 40,000 Lek at the end of 2023 has put pressure on costs, causing many customers to flee from Albania towards cheaper prices in Asian and African countries./ Monitor magazine