Recession fears have grown in the ready-to-wear industry, which broke an all-time export record of $20.2 billion last year and set a target of 23 billion dollars for this year. The main representatives of the sector, which closed the first half with an increase of 14.5% and an export of 10.8 billion dollars, said that if the recession deepens in the EU, which is the biggest market with a share of over 70%, the year will end 5% below target. Some industry representatives have said that under these conditions, reaching 2021 figures can be considered a success. On the other hand, the businessmen who explained that the drop in the parity will lead to a profit loss of about 7% in the sector, said that they should increase the price in the last quarter of the year.

Gültepe: There could be a decrease of 5%

Mustafa Gültepe, chairman of the Istanbul Garment and Apparel Exporters Association, who is currently the chairman of the Assembly of Turkish Exporters, recalled that the sector performed quite well in the first half of the year. Recalling that they have set a target of $23 billion for the full year, Mustafa Gültepe said recession anxiety triggered by mounting inflationary pressure, especially the EU, which is the main sector market, creates problems for recession targets. concerns gripped the ready-to-wear industry. While some industry representatives expect a 5% decline, others said catching up with last year can be considered a success. He said he would know. Mustafa Gültepe said: “We believe that if there is no recession, we will reach 23 billion dollars by the end of the year. We hope there will be no recession. If this happens, we will end the year with an increase of 5% below the target.

This means a decrease of around 1 billion 150 million in exports. Again, economic indicators, especially those from the EU, heightened fears of recession. Retail sales are down in many countries. The possible energy crisis, on the other hand, portends significant contractions in the economy, especially in Germany. The Union of Chambers and Commodity Exchanges of Turkey, President of the Ready-made and Garment Sector Assembly, Şeref Fayat, said that the activity was negatively affected by the effect of parity.

Catching 2021 will be considered a success

Fayat said: “The depreciation of the EU currency has led to a huge stalemate. In the second half of the year there is a malaise in the works due to the possible energy crisis. The PMI is also causing concern. Although there are good indicators in the PMI data, some have bad scenarios. It therefore seems that the ready-to-wear industry, whose current parity profits have melted, will enter a crisis, whatever the course of the EU. There are prizes that we give to the region for 6 months. At the prices given 4 to 5 months ago, we lost 5 to 10% of raw materials. This situation creates a very serious unprofitability. There is a shortage of natural gas. This can create serious buying problems in the EU. We started the annual increase target with 15% at the beginning of the year. While saying 10% can do it, it will be considered a success to catch up to last year or stay a bit higher due to the latest developments,” he said.

“We expect a contraction of the sector”

Major economic indicators in Turkey also support the possible decline. In the textile sector, which supplies raw materials to the ready-to-wear sector, the decline in capacity utilization rates has continued for 3 months. Capacity utilization rates in the textile sector, which reached 81% in March this year, fell to 78.6% in May and 77.6% in June. Ramazan Kaya, chairman of the Turkish Garment Manufacturers Association, is another name who expects lower exports in the coming period. Kaya said, “Household purchasing power has declined. There is a recession in the world. There is also a shrinkage in the country. The first 6 months have somehow passed, but we expect a contraction over the next 6 months. We are waiting for you not only in Turkey but all over Europe. This will certainly be reflected in the export figures,” he said.

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