09th March 2012, www.lankabusinessonline.com, By Jayantha Kovilagodage
Demand from the United States for apparels would be strong this year, though Europe may be weak and domestic conditions in China, a key competitor favoured Sri Lanka, a top industry official said.
"I am of the view that the American market is beginning to pick up," Mahesh Amalean, head of MAS Holdings, a top apparel exporting group said.
"There is labor shortage in China, in the areas where appeals are manufactured."
He said capacity in China is also being utilized to cater to the local market, which is increasingly becoming more prosperous.
"Because of all those reasons, countries like Bangladesh , Sri Lanka, Vietnam, Indonesia are now busy," Amalean said.
"And I believe you will see growth. Like we saw last year, you will see growth this year, and next year as well."
China's Renminbi has risen from 8.2 yuan to the dollar in 2000 to 6.2 now, pushing real wages up, poverty down and forcing firms to increase labour productivity.
Analysts say currency depreciation, which destroys the real value of salaries wage earners, pensions of old people and lifetime financial savings of everyone is the principle tool through which a state impoverishes citizens.
Competitive currency depreciation began during the great depression and was institutionalized as a policy tool partly after the interventionist administration of Franklin Roosevelt depreciated the US currency from 20 to an ounce of gold to 35.
Amalean said Europe is expected to be stagnant, but exporters had done well despite the loss of trade preferences.
In 2011 Sri Lanka's apparel exports rose 24.6 percent to 4.2 billion rupees, while exports overall rose 22.4 percent to 10.4 billion rupees.
Sri Lanka's Export Development Board has said that exports to the US, which make up 20 percent of the total, rose 26 percent. Exports to the UK, which made up 11 percent of the total, rose 12.4 percent.
The European Union took up 34 percent of all exports.