CMAI SURVEY INDICATES DOMESTIC GARMENT INDUSTRY ONCE AGAIN IN MIDST OF A MASSIVE CRISIS – 77% MANUFACTURERS PLANNING TO REDUCE STAFF AND JOBS
- Majority of Manufacturers down to 25% of pre-covid sales
- 72% of Manufacturers face more than 50% order Cancellations
- May expected to be worse, normalcy not expected before Diwali
- More than 50% Workers go back to Villages in most Factories
The Clothing Manufacturers Association of India ( CMAI )’s Survey conducted at the beginning of May ’21 shows that the MSME manufacturers of the Domestic Garment Industry are once again faced with a massive challenge caused by the current wave of COVID-19, with 77% of the Manufacturers surveyed contemplating reducing their staff by more than 25%.
The Industry, which went through a torrid last year, was just about recovering at the beginning of 2021, reaching close to 80% of its pre-Covid sales levels. However, the Study indicates 55% of the Manufacturers achieving less than 25% of their sales during April 2021.
Uncertainty is looming large for these Manufacturers, as 72% of the respondents have seen more than 50% of their orders on hand being canceled by their Buyers. This will lead to a huge problem of dead Inventory in the coming months.
The situation is equally grim on the Cash Flow front, with 72% of the respondents receiving less than 25% of their due payments in April, and another 12% receiving less than 50% of their dues.
What makes the situation more worrying is that as a result of regional lockdowns increasing across the country, 90% of the members believe May to be far worse than April, and 45% not expecting markets to revive before the Diwali Festival. In fact, more than 20% do not see the revival starting before 2022.
The impact on employment is likely to be drastic, with 77% of the respondents surveyed planning to cut up to 25% of their staff in the coming months. The Workers themselves seem to have sensed this impending doom, and 64% of the Factories have seen more than 50% of their workers returning to their villages
Whilst fully supporting the various State Governments in their measures to control the pandemic, CMAI has urged the Governments, in particular the Governments of Maharashtra and Karnataka – two of the largest clusters of Garment manufacturing – to give due consideration to the Domestic Garment Industry as and when they contemplate the opening up of economic activity. CMAI has urged the Government to permit Garment Factories to operate with 50% of its capacity with immediate effect, but strictly following Covid Protocols.
CMAI plans to continue its periodic Surveys to understand the ground realities of the Industry and communicate the same to the Governments concerned.