Employment in Mexico’s textile, apparel and leather industries was down 5.8 percent in June on a year earlier, government statistics institute INEGI said yesterday.
The figures were released against the backdrop of continuing stagnation in the country’s industrial sector and rising unemployment, as the economy struggles to recover from the 2001 rececssion.
The country’s embattled auto sector also turned in a disappointing set of results as Chinese competition in the U.S. market continued to bite. Employment in the metal products, machinery and equipment sectors plummeted 8.4 percent. The bad news was compounded by yesterday’s announcement by the world’s largest auto parts maker, Delphi, that it was considering moving some of its production operations out of Mexico due to high costs.
Mexico's textile, apparel and auto parts sectors have been among the worst affected by the growing Chinese presence in the US market, which is the destination for 90% of Mexican exports. As in many other export-orientated economies, the trend is being driven by the low wages in China that are undercutting exporters, together with a Yuan that many economists consider undervalued.
