Business Times

Garment woes continue as markets drop

Uncertainty over GSP concessions continues to put pressure on prices while a drop in retail markets in the US and Europe is further affecting demand, industry officials said. Rohan Masakorala, secretary-general of the Joint Apparel Association Forum, said garment exports fell by 20 percent in February 2010 and around that figure in January. “"We are watching March figures and hope there is some pick-up, or we will have a crisis on our hands," he said.

He said pressure is mounting on pricing (slashing local margins) as buyers are uncertain whether the tax breaks would continue. The Ceylon Federation of Labour in a statement to mark May Day said Sri Lankan authorities were placating business interests and capitalist employers by implementing a series of measures to create a flexible labour market. "Labour flexibility in essence means turning workers into dispensable commodities," it said.

Last year, the government said it planned to introduce a five-day week, nine- hour work day, with Saturday off, as employers said they were struggling to keep loss-making factories open due to falling orders. Unions protested over the move but had no objection if workers agreed to such a move.
Another step was to allow failed companies to close under an Unemployment Benefits Insurance Scheme. Both steps are yet to be enforced due to disagreements between unions, employers and government authorities.

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