BULGARIAN TEXTILE AND APPAREL INDUSTRIES, FIRST HALF OF 2007

1. EXPORTS AND IMPORTS

The Bulgarian textile sector, as in previous years, is obviously subject to positive development tendencies. Because of methodological problems, after the entry of the country into the EU, as it concerns statistical data about exports and imports it is still dubious whether exports are falling down.

According to BAATPE the statistical data about the export of apparel and textiles does not reflect correctly the real market situation. BAATPE's expert position is that even if there is a decrease in textile exports it is rather insignificant. We are grounding our position on the information from our members as well as from all apparel producers we have been approaching in the last several months that their companies are working at full capacity. Furthermore the rise of the productivity in the sector also leads to this conclusion.

The registered decrease in the statistical data of export and import values is unrealistic and can be attributed to the different methodology for statistical surveillance of the trade with the EU countries.

2. EXPORTS AND IMPORTS according the data from the National Statistical Institute

2.1. Overall Tendency

• According to National Statistical Institute data in the first half of 2007 there is a decrease in overall Bulgarian textile exports (Ch. 50-63 of the HS) of -10.5%.

Source: NSI

• Nevertheless there is a substantial increase in textile raw materials and fabrics exports (+9.8%), while apparel exports are falling down with -15.6% (see Graph.).

2.2. Exports to the EU:

• The share of the exports to the EU countries rises to 88.6% of overall Bulgarian textile exports in the first half of 2007. It is the biggest share in the last several years (83% in 2005 and 86.1% in 2006 respectively) pursued with a substantial decrease of other market destinations (as for the US market).

2.3. Tendencies in textile and apparel imports according to NSI figures: Overall decrease in textile imports -6% (compared to the first half of 2006). There is a decrease in textile fabrics and raw materials imports with 5% and 6% as it concerns apparel imports.

3. EMPLOYMENT AND AVERAGE SALARIES

3.1. Employment:

Overall employment in the textile and apparel industries is remaining on the decreasing scale as in previous years:

• The decrease is proportionally low, especially considering the employees pressure towards increasing of salaries as of the last months.

3.2.Average salaries:

•  The average salary in the textile and apparel sectors is steadily increasing:

• The increase in average salaries for the employees in both sectors (with about 17%, see table) is among the biggest for all registered national economic activities. According to preliminary data of the NSI a bigger increase in the first 6 months of 2007 was observed only for state administration employees.

4. PRODUCTIVITY

•  The overall productivity in the Textile and Clothing sector continues to be on considerably lower levels than the average productivity in the EU. According to a publication of the Ministry of Economy and Energy (2007) the difference is about 6 times.
• Оn this ground the high level of productivity growth is not a surprise. Having in mind the methodology of registering the gross value added - GVA, the growth can be attributed also to higher sales prices.
• With respect to the above, the productivity in the textile and clothing industries increases steadily. In the first half of 2007 the average employee has produced with one third GVA more than the corresponding 2005 GVA levels (3930 BGN in 2007 compared to 2 890 BGN in 2005).

• The increase in productivity rates only for the first 6 months of 2007, compared to the same period of the previous year is with more than 20% (see Graph.).
• The GVA created in the production of apparel (incl. leather products as per NACE code 18) is significantly higher and rises faster than the one for the production of textiles (NACE 17).

CONCLUSIONS: According to the data provided there is a substantial increase in productivity rates which underlies the up streaming development of the Bulgarian textile and apparel industries. Thus the increase in average salaries is grounded and follows strictly productivity growth rates. Last but not least the reaction of textile and apparel employers proves to be timely and socially-responsible towards employees' expectations. In case of sustaining the above mentioned development tendencies there is no reason for pessimistic forecasts as it concerns the competitive positions of the local textile and apparel industries in the years to come.