An industry group warned on Wednesday that about 27,000 workers in the wearables industry may lose their jobs following a spate of cancellation and deferred orders from clients abroad.
Confederation of Wearable Exporters of the Philippines executive director Maritess Agoncillo said 21,600 to 27,000 workers, representing 8 percent to 10 percent of the sector’s 280,000 employees, might be displaced temporarily across the four segments of the industry.
“I don’t want to alarm the workers, but if we see recession coming our way, this is likely to happen. We’re talking about a recession in the US being declared,” she said.
“Currently, we are experiencing around 3.5 percent to 4 percent of workers affected with a base of 270,000 workers covering wearables. It might reach to a maximum range of 8 percent to 10 percent if current trend extends longer or global demand conditions worsen,” she said.
Agoncillo said about 4,000 workers were retrenched from four apparel firms operating at the Mactan Economic Processing Zone in September.
“This will be a continuing trend to some factories, whose customers are starting to cut down on their projections. So we expect a few more temporary closures, hopefully, partial retrenchment of workforce in the next few months. We’re not closing down. There will be partials, or pocket retrenchment,” Agoncillo said.
The US continues to be the single biggest client of the Philippine wearable industry which is comprised of apparel, textile, travel goods and footwear segments.
Data showed that the wearable industry grew by 14 percent in the first seven months of 2022, with 60 percent growth for apparel, 20 percent for travel goods, 0 percent for textile and 9-decline percent for footwear.
The group said growth in 2022 could hit 20 percent to 22 percent, barring any economic disruptions.
The January to July shipments covered the fall/winter 2022 deliveries, but the orders for fall/winter 2023 are not looking good, CONWEP said.
Reports said consumer confidence index in the United States dropped to 96.18 percent, an indicator that US consumers were not confident to spend as they worried about another possible recession.
“CCI clearly reveals the softening of the global apparel market. Orders come in trickles in as early as the second quarter of 2022 with global consumer demand slowing down. Brands of taking their cue from the CCI report,” Agoncillo said.
Brands would rather move existing inventories in stores than place new orders for deliveries, she said.