The current pandemic has impacted various sectors adversely including the textile sector. We will evaluate the impacts of COVID-19 on the textile industry of Pakistan. We will be analyzing its revenue generation both pre and post COVID-19.
The textile industry has been the leading manufacturing industry in Pakistan. According to the Government, the textile contributes 60% to the exports.
It also employs 45% of the total labor force in the country. This makes it the single largest contributor to the workforce of Pakistan. In this blog, we will be reviewing this giant sector’s performance since the spread of COVID-19.
Revenue and Export
The revenue generation, before coronavirus, was already struggling due to the historic decrease in the Pakistani rupee. The negative payment balance had created huge pressure on the single largest contributing sector to the exports of Pakistan i.e. Textile. However, due to the decreased cultivation of cotton, the textile industry was not reaching its full potential. The rival textile industries including Bangladesh have affected the Pakistani textile industry adversely. The lack of automation in this sector has also caused it to lack behind in the international market. Most of the international brands are shifting their confidence from the Pakistani textile sector to other sectors of the region.
The countrywide lockdown imposed by the federal government aggravated the problems of the Pakistani Textile Industry. Although the government was expecting a rise in the exports of textile goods, the impact of coronavirus changed everything. The enforcing of lockdown had both short term and long term effects on the textile sector. It brought the sale of manufactured textile products to zero because of the complete closure of retail outlets. It also caused the loss of key businesses related to special occasions such as Eid. The enforcement of a strategic lockdown a week before Eid-ul-Azha was also drastic.
The true impact of coronavirus on the textile only became clear in the aftermath of the lockdown. The textile exports had declined by 4.46 percent by March 2020. The data from the Pakistan Bureau of Statistics (PBS) indicated that exports of cotton cloth had declined by 2.99 percent. The exports of cotton yarns saw a decrease of 1.9 percent. Meanwhile, exports of towels had increased by 0.58 percent. It is predicted that total national exports will also decrease by $ 3 billion as Pakistan’s key exports include textile.
Future of the Workforce of the Textile Industry in Pakistan
Coronavirus impacted the Pakistani textile industry’s workforce in Pakistan directly and indirectly. The direct impact consists of downsizing of the working staff from textile industries amid business losses due to coronavirus. According to a recent study conducted by Labour Collective, around 1 million Pakistani textile workers are set to lose their jobs during COVID-19. It is also imperative to note that labor from other sectors that are informally associated with the textile sector, such as transportation, have also lost their jobs due to coronavirus.
The economic activity of the textile industry has been slow in the post lockdown phase. With the pandemic still spreading, people are cautious to get out of their homes and shop. The masses in Pakistan do not prefer to buy clothes online, thus, the capital generated by the textile sector has significantly decreased. However, the positive impact of this is that textile retail stores are now maintaining a larger and more vibrant digital presence. This has resulted in additional hiring of IT professionals, creating a wide range of job opportunities.
For the Pakistani textile industry to perform well in the post-COVID-19 world, it is essential to make a few key changes. As mentioned on the official website of the Federal Ministry for Textile of Pakistan, in today’s highly competitive global environment, the textile sector needs to upgrade its supply chain, improve productivity, and maximize value-addition to be able to survive. Increased competition from markets in the subcontinent region has removed the monopoly that the manufactured goods, as well as raw material from the Pakistani textile sector, enjoyed globally. In order to protect cotton cultivators, new laws must be made with a fixed price of cotton. The transportation process of raw material, as well as manufactured products, also requires streamlining to ensure their cheaper and faster transportation.
With a population of about 220 million, Pakistan has the potential to become a global leader in textile products production. The labor cost in Pakistan is already pretty low in comparison to that in first world countries. A few careful reformative steps in the right direction will make the Pakistani Textile Industry amongst the leaders in the world in no time.