Pakistan’s industrial manufacturing sector — like elsewhere in the world — has suffered from the slowdown in global consumption and the rise in energy costs following the outbreak of war in Ukraine.
But the difficulties of the textile sector, which accounts for 60 percent of Pakistan’s exports, are compounded by the critical state of the economy and months of political chaos.
The textile and clothing sector employs around 40 percent of the country’s 20 million-strong industrial workforce. The main export markets are the US, EU, the UK, Turkey, and the UAE, supplying cotton fabrics, knitwear, bed linen, towels, and ready-made garments to global brands such as Zara, H&M, Adidas, John Lewis, Target and Macy’s.
But many factories have closed in recent months — at least temporarily — or are no longer running at full capacity. According some estimates perhaps 700,000 jobs have been lost in the last year or year and a half.
In Pakistan, the industry was buoyed at the tail end of the coronavirus pandemic, when it was freed of restrictions earlier than regional rivals India and Bangladesh and benefited from government financial aid, including slashed energy rates.
After the cotton crop failed last year the textile industry was unable to compensate by buying from abroad because of a freeze on imports imposed by the government to preserve its forex reserves. Thousands of containers filled with raw materials and machinery essential for the country’s industries were held up for months in the southern port of Karachi.
Textile companies also saw the cost of capital rise significantly, contending with interest rates of 22 percent as the central bank sought to curb record-breaking inflation.
Pakistan’s overall market share in the textile and garment industry was nearly 2.25 percent about two years ago. Now it’s down to around 1.7 percent, a former chairman of All Pakistan Textile Mills Association. He however, some hope if the political situation settles following an election due before the end of the year.
Pakistan’s textile industry bears the brunt of economic woes
