Employment crunch hits textile and footwear industries

The textile, apparel, and footwear industries continue to be "hit" by smuggling, undervaluation, and domestic economic uncertainty, which has resulted in job losses of up to 30% so far this year in some companies, according to the Confederation of Industrial Chambers (Concamin).

Manuel Espinoza, president of the Concamin Customs Commission and a textile industry expert, confirmed that the industry is showing very serious signs of decline, with 200,000 jobs lost in the last seven quarters.

He explained that 40 companies in the sector have closed in the last year due to smuggling. He even mentioned being one of those affected by this illegal phenomenon, as Espintex, its cotton thread plant in Puebla, closed, and its staff was laid off.

This has resulted in around 200,000 formal workers moving into the informal sector. "Employees are leaving and entering the informal sector, and this means that social security, Infonavit, and other benefits are also not being paid."

In the footwear sector, formal employment has decreased by 30 percent from September 2023 to date.

Although the federal government implemented tariff measures on products imported from Asia starting this year, the measures have not been effective, as shoe smuggling continues to increase.

“We estimate that 23% of national footwear consumption comes from some form of contraband. This is apart from legal imports, with which manufacturers have no problem. And this is a figure that has been increasing and has us very concerned,” said Mauricio Battaglia Velázquez, president of Concamin's Commission for the Defense of Legality and former leader of the footwear industry.

In early May, the Mexican government also announced the expansion of the number of products with reference prices for imports, in addition to adjusting those already in effect, with the aim of identifying undervalued products.

Business leaders commented that the closure of companies is not limited to the loss of jobs that operated the factory, but also encompasses the entire country's production chains. "Speaking of the textile industry, which is linked from the field, agriculture, to the manufacturing of the product."

In the case of footwear, the same thing happens, due to the entire chain from the tannery.

Furthermore, "there are short-term technical shutdowns, and the most serious aspect is that companies are beginning to close, both in the footwear manufacturing sector and in the supply chain that reaches the tannery," said the former president of the Guanajuato State Chamber of the Footwear Industry (CICEG).

Since the end of 2023, 25,000 jobs have been lost in the footwear industry in Guanajuato, although a total of 50,000 jobs have been lost nationwide.

They don't overcome the pandemic

According to data from the Monthly Survey of the Manufacturing Industry (EMIM) released this Wednesday by the National Institute of Geography and Statistics (INEGI), the textile manufacturing, apparel and non-apparel manufacturing, and leather and fur industries are among the hardest hit in terms of employment.

Furthermore, the labor shortage in these areas extends beyond this year. In the textile inputs sector, figures as of May show that the payroll is 29% lower than in 2019, prior to the COVID-19 pandemic.

In the clothing industry, the decline over the same period was 21.5 percent, and in the case of leather and fur manufacturing, it was 18.3 percent.