WASHINGTON — The global economy may have pulled out of recession, but the latest forecast from the World Bank shows a slowing pace of growth this year.
This story first appeared in the February 1, 2011 issue of WWD. Subscribe Today.
The bank’s economists are expecting “slower but still solid growth” this year and next, with a projection of a 3.3 percent increase in global gross domestic product in 2011, down from the estimated 3.9 percent growth rate in 2010.
East Asia and the Pacific — including China, Vietnam, Malaysia, Thailand, the Philippines and Indonesia — led the global recovery with an estimated 9.3 percent GDP growth. China was the big driver in the region, posting a 10 percent increase in GDP and a 35 percent rise in imports.
Below is a look at the emerging markets with the strongest growth in GDP in the region that are poised to attract new business and expand production in 2011.
Despite rising labor and raw materials costs, which have forced a migration of apparel and textile production inland and sent some production to neighboring countries, China remains the leading producer in the sector and is showing no signs of weakening. Its share of imported apparel and textile products to the U.S. reached 47 percent in the first 11 months of 2010, accounting for 26 billion square meter equivalents in imports, with a value of $36 billion, according to U.S. Commerce Department statistics.
While China has been an established powerhouse in apparel and textile production for the past decade, India is considered one of the leading emerging markets for new business. It has been at the center of controversy over its control of cotton exports, which has driven up global prices and affected every corner of the fashion industry. But the country — which has a 6 percent share of the U.S. apparel and textile import market and shipped 3.02 billion SME, valued at $5 billion, in the 11 months through November — is a burgeoning major player.
Exports are a big economic driver for Thailand, which has a well-developed infrastructure and free-enterprise economy, despite recent political unrest. Among the leading exports are machinery, electronic components, agricultural commodities and jewelry, accounting for more than half of its GDP. The country is still a small apparel and textile supplier. It has a 1.47 percent share of the import market and shipped $1.4 billion worth of goods to the U.S. from January through November last year.
Malaysia has tried to move further up the value-added production chain, but it is still reliant on exports as a key economic driver. Electronic exports are a key sector, as are oil and gas. The country is a small apparel and textile supplier, with just a 0.3 percent share valued at $433 million through November last year.
Shaking off the vestiges of a brutal 26-year civil war that ended in 2009, Sri Lanka has managed to post average GDP growth of nearly 5 percent in the last 10 years, according to the CIA World Factbook. Apparel and textiles continues to be one of Sri Lanka’s “most dynamic” sectors, along with food processing, food and beverages, port construction and telecommunications. The country is a small apparel and textile producer, with a 0.6 percent share of the U.S. import market.
2010* : 6.8%
The Philippines is less reliant on exports to drive its economic growth. A big growth industry has been business process outsourcing. The country is a small apparel and textile supplier, with a 0.77 percent share of the market, valued at $995.5 million, in the last 11 months of 2010.
Since joining the World Trade Organization in 2007, Vietnam has proven its prowess at economic liberalization and international integration. Its labor force is growing by more than one million people a year, according to the CIA. It is also the fastest-growing apparel and textile producer, posting a 32.6 percent increase in U.S. imports for January to November 2010 versus the same period a year earlier, and is often used as an alternative platform to rising labor costs in China. It now controls a 5.15 percent share of the U.S. apparel and textile import market, shipping $5.8 billion in goods the first 11 months of 2010.
Relying heavily on domestic consumption as the engine of economic growth, Indonesia came out of the global financial crisis relatively unscathed, joining China and India as the only G-20 members posting growth during the crisis, according to the CIA. Indonesia will be a standout in attracting new apparel sourcing in 2011, according to industry experts. Indonesia is the fifth-largest supplier of apparel imports to the U.S., with a 3.2 percent share in the market, valued at $4.3 billion through November.
Source: World Bank
* 2010 GDP growth rates are estimates, and 2011 GDP growth rates are forecasts. Based on official exchange rates.