Ecuador’s textile industry lost 36% of its turnover in 2020 amid declining local purchasing power

RIO DE JANEIRO, BRAZIL – The Ecuadorian textile industry is suffering the consequences of a challenging 2020, which came after almost 5 years of declining figures. The sector went from invoicing US$1.387 billion in its local market in 2019, to registering sales of US$886 million last year, a contraction of 36%, according to government figures.

In general, Ecuadorian industrialists are looking favorably on the country’s domestic demand and seek to meet local purchases before thinking about exports. In addition, companies have opted to do most of their processes in-house and expand finishing chains such as dyeing and printing.

One of the great challenges of the sector is to understand the new demand, the needs of Ecuadorians and, above all, to adapt to the new household spending, which has contracted by more than 20%. Even with the high charges in services and taxes, the country’s protectionist tariffs are so high that the local industry has priority in the eyes of the consumer, even for prices.

The textile industry saw a larger contraction than apparel, although overall the sector recorded double-digit declines in all indicators. The Government and industrialists expect to see a rebound in sales and local demand that will lead to a better dynamic in the generation of employment this year.

For 2021, according to the Asociación de Industriales Textiles de Ecuador (AITE), the sector’s main goal is to survive and return to normal operations, with a view to industrial growth of 4.7% and a production increase of at least 10%.