This is the second part of the series selected News 2021. We hope that you find what you are looking for.
USDA – Bangladesh Cotton and Products latest update
Despite COVID-19, Bangladesh’s cotton imports increased 9 percent in marketing year (MY) 2019/2020, to 7.5 million bales [or 1.63 million metric tons (MMT)]. Bangladesh’s high demand during the first half of the marketing year combined with success in combating the COVID-19 outbreak has allowed textile and garment companies to maintain operations, despite a few short-term disruptions.
U.S. cotton exports to Bangladesh in MY19/20 reached 230 thousand metric tons (TMT), up 28.9 percent over MY18/19. The U.S. cotton market share was approximately 14 percent in MY19/20, which is second to India’s 23 percent market share. For MY20/21, Post estimates Bangladesh’s cotton imports will slightly decrease to 7.1 million bales, given the uncertainty in global demand and relatively low import numbers in the first months of MY2020/21.
SITUATION AND OUTLOOK
As noted in Post’s Cotton Annual report, the COVID-19 pandemic disrupted Bangladesh’s textile and apparel industry, resulting in a sharp decline in textile exports to major markets, including the United States and the European Union, as a result of retailers modifying purchase orders. A significant number of Bangladeshi textile and garment exporters have, and are continuing to, make adjustments to their operations, including but not limited to: setting up COVID-19 testing labs for employees, developing new distancing and health protocols, and working with retailers to restructure contracts.
Preliminary data from the Bangladesh Export Promotion Bureau shows that the export value of apparel in the first 10 months of calendar year (CY) 2020 dropped 19 percent to USD 22.4 billion USD, as compared to USD 27.6 billion USD over the same period last year (Figure 1). However, this decline is smaller than originally forecasted by industry experts in May 2020 because Bangladesh’s success in combating COVID-19 has allowed companies to maintain operations despite a few short-term disruptions. The decline in apparel exports is a result of a depressed global demand, increased competition from Vietnam, and heightened production and safety standards in Bangladesh’s ready-made garment (RMG) industry. Export value dropped 85 % in April and 62 % in May when compared to the same month last year.
Bangladesh’s yarn production is recovering following an extended period of market disruption due to COVID-19. According to Trade Data Monitor (TDM), the value of Bangladesh’s cotton yarn exports under harmonised system (HS) code 5205, 5206, and 5207 in the first 10 months of CY2020 dropped 27 % to USD 11.3 million USD, as compared with the same period last year (Figure 2). With Bangladesh’s domestic yarn demand rebounding over the past 3 months, the local spinning industry expects that Bangladesh’s cotton yarn production in CY2020 will continue to see positive growth as a result of increased demand of knit export.
According to a local yarn producer, prices of yarn have increased substantially over the August to October timeframe because of an uptick in garment demand before the upcoming holiday season in the EU and the United States. Through the first nine months of CY2020, the value of cotton yarn imports is up over 12 percent at USD 692 million USD compared to USD 617 million in 2019 (Figure 3). China alone has exported over USD 148 million USD worth of cotton yarn to Bangladesh this calendar year and over USD 225 million USD in CY2019.
According to the Bangladesh Textile Mills Association (BTMA), in 2019, there were more than 433 spinning mills in Bangladesh that could produce 2.9 million tons of yarn per year when at 100 percent capacity. Despite the large domestic spinning capacity, Bangladesh imported more than USD 850 million USD worth of cotton yarn in CY2019.
Bangladesh has import duties of 5 % for man-made fibre, 25 % for fabric, and 10 % for yarn. While seemingly high, export-oriented RMG factories can import yarn and fabric under a duty draw back incentive, which reimburses all customs duties paid on imported yarn, and fabric (but not taxes such as the VAT and Advanced Income tax). The draw back incentive program enables Bangladesh’s large imports of cotton yarn and fabric from India and China.
In MY 2020/21 (August-July), cotton cultivation area is forecasted to be 45000 hectares (HA), which is unchanged from the previous year. Production is expected to increase 2.11 percent over last year to 145000 bales (480lb bales) because of the expansion in cultivation of hybrid varieties, good weather and support from the Ministry of Agriculture’s Cotton Development Board of Bangladesh (e.g., supplying new seed varieties, providing technical training, and assisting with the monitoring of the cotton crop). Early harvest data, according to the Cotton Development Board, indicates a good yield from the MY 2020/21 crop.
Cotton is cultivated in 20 to 22 districts of Bangladesh, covering only 0.55 percent of total cultivable land (total cultivable land is 8.1 million HA). Domestically produced cotton accounts for approximately 4 % of total consumption. Bandarban, Jhenaidah, Jeshore, and Rangamati are the major cotton producing areas of the country. Bangladesh produces many varieties of cotton, including Gossypium hirsutum, Gossypium arboretum, Gossypium herbaceum, and Gossypium barbadense. American Upland cotton (i.e., gossypium hirsutum) is cultivated in Rabi (Winter) crop season during the July- August timeframe and harvested in December-January. Other varieties produced in Kharif (Summer) crop season are cultivated in Bangladesh’s hill tract region in the March-April timeframe and harvested in December-January.
The Cotton Development Board set a goal of domestically producing two million bales on 200000 hectares of land by 2041.
Research and Development
The Cotton Development Board (CDB) has introduced Bt cotton in Bangladesh through a Material Transfer Agreement (MTA) with foreign seed companies. With the permission of the NCB in October 2017, CDB signed an MTA with JK Agri-Genetics Ltd (JKAL), India to obtain Bt cotton hybrid varieties containing truncated Cry1Ac Bt gene. With the permission of the Institutional Biosafety Committee of the Cotton Development Board, the CDB began a contained trial on August 7, 2018 with two Bt hybrid cotton varieties: JKCH 1947 Bt and JKCH 1950 Bt. A contained greenhouse trial to test the efficacy of the introduced Bt varieties was successfully completed. On March 4, 2020, CDB received National
Committee on Biosafety’s (NCB) approval to start a confined field trials (CFTs) for the crop year 2020- 21. The goal is development of an efficient GE cotton variety which is resistant to Bollworm and podoptera/ Armyworm.
Post previously forecasted that Bangladesh’s cotton consumption would drop sharply in the second half of MY19/20 and continue to decline in MY20/21 due to the negative effects of COVID-19.
However, Bangladesh’s cotton consumption, reflected by cotton imports and domestic demand for cotton yarn, has remained strong, due to Asia’s overall success in combating COVID-19.
Domestic consumption of apparel and textile products has been mildly impacted because of the cancellation of large events like Pahela Bioshakh (Bengali New Year) and Eid Festival (Muslim’s biggest festival) that often promote clothing sales. But overall, the negative impact of COVID-19 has been lower than originally forecast. Continued competition with locally produced synthetic fibres (see Trade section), a slight decrease in domestic consumption, a decrease in global garment and textile demand, and a reduction of capacity utilization is expected to reduce overall MY2019/20 cotton consumption relative to last year. Post revises MY2019/20 cotton consumption to 6.9 million bales compared to the previous forecast of 6.5 million bales based on industry feedback and cotton import data. Post forecasts MY2020/21 consumption to return to pre-pandemic levels at 7.2 million bales as modest domestic and international demand are expected to increase in 2021, especially if the vaccine is effective against COVID-19 and the world’s economies are able to recover.
MY 2018/19 raw cotton consumption is revised down to 7.2 million bales from the previously released annual cotton report due to adjustment with the USDA official number.
According to official data, Bangladeshi cotton imports in MY19/20 totalled approximately 7.5 million bales (or 1.63 MMT), which is considerably higher than Post’s preliminary estimate in the annual report. Given that major textile and apparel markets, including the United States and the EU, continue to struggle with the ongoing pandemic, Post lowered its estimate for Bangladesh’s cotton imports in MY20/21 at approximately 7.1 million bales. This estimate is subject to change based on COVID-19 developments.
U.S. cotton holds a strong position in the market, reaching 1.1 million bales in MY2019/20, or 14 % market share by volume. India has a market share of approximately 23 % and Brazil holds approximately 14%.
In addition to the increase in imports of raw cotton in MY 2019/20, Bangladesh also increased imports of cotton yarn. From August 2019 to July 2020 imports of cotton yarn is raised 4.7 % to 0.28 million MT.
Local spinners continued to increase stocks in MY19/20 due to the large supply globally and decreasing cotton prices. Post estimates that the stocks-to-use ratio in MY19/20 was at 37 percent and is forecast to decrease in MY20/21. Further research into cotton stocks is needed and the stock-to-use ratio is likely to be modified once such research is conducted.
Bangladesh is not party to the Generalized System of Preferences (GSP) facility from the United States. Although GSP impacts only a small group of textile products, the desire to obtain GSP is strong among Bangladesh’s textile and garment manufacturers.
The Cotton Council International (CCI) has continued to engage in marketing activities despite in- person restrictions related to COVID-19. Recent events have delivered updates on the global cotton economy and the implementation of the U.S. Cotton Trust Protocol, as well as a virtual event of Cotton Day 2020. Additionally, textile manufacturers were able to visit with partners and buyers in virtual meeting rooms.
In June 2020, the Government of Bangladesh (GoB) announced its budget for fiscal year (FY) 2020/2021 (July-June). Both the textile and garment industries will continue to get support from the government to recover the economic turmoil caused by COVID-19. The GoB replaced the existing 5 % ad valorem VAT on polyester, rayon and all other synthetic yarn and introduce fixed value added tax rate of BDT 6 (USD 0.07) per kg for all these products. The GoB also reduced the VAT on all kinds of cotton yarn from BDT 4 (USD 0.05) to BDT 3 (USD 0.04) per kilogram while also retaining the duty exemptions on imports of raw cotton. More extensive COVID-19 recovery measures are expected in future months.
Tariffs on cotton
Cotton fibre (HS code 5201) has a zero tariff, and a zero percent value added tax.
Cotton, carded or combed (HS code 5203) has a five percent tariff, and a 15 % value added tax.
In September 2020, Bangladesh’s Plant Quarantine Wing (PQW) of the Ministry of Agriculture reinstated a cotton fumigation service charge for imported cotton. The fumigation service charge has been raised from 360 BDT per container to 50 BDT (USD 0.58) per bale. The service charge will cost Bangladesh’s U.S. cotton importers approximately an additional USD 638000 per year. A cost that will increase the economic stress currently facing Bangladesh’s Textile Mills Industry.
ICAC Cotton: Review of the World Situation’: Updated Outlook, the Post-COVID Market and US-China Phase One
Highlights from the December 2020 issue of the ‘Review’ include:
- An update of the near-term outlook for cotton
- Commodity markets in a post-COVID world
- Early analysis of the US-China Phase One deal
- Review of the 2019/20 cotton season
- Hirsutum in Egypt?
‘Cotton: Review of the World Situation’: Updated Outlook, the Post-COVID Market and USA-China Phase One
The International Cotton Advisory Committee (ICAC) has released the final 2020 issue of ‘Cotton: Review of the World Situation’. Highlights of the 40+ page publication include:
- An update of the current cotton market;
- An outlook for all commodities as we approach the beginning of 2021;
- An early analysis of the US-China phase one trade deal that looks at trade tensions and impacts on the cotton market;
- A review of the tumultuous and unprecedented 2019/20 season; and
- Analysis of the potential introduction of Hirsutum cotton into Egypt, a country renowned for its extra-fine cotton breeds.
Formed in 1939, the ICAC is an association of cotton producing, consuming and trading countries. It acts as a catalyst for change by helping member countries maintain a healthy world cotton economy; provides transparency to the world cotton market by serving as a clearinghouse for technical information on cotton production; and serves as a forum for discussing cotton issues of international significance. The ICAC does not have a role in setting market prices or in intervening in market mechanisms.
USDA – India Cotton and Products Update -December 2020
Report Highlights:Post estimates cotton production at 29.3 million 480-lb. bales in marketing year (MY) 2020/21 on an area of 13.3 million hectares. Cotton prices have improved due to strong export demand for raw cotton and cotton yarn. Farmers continue to deliver their crop to the government’s procurement scheme under the minimum support price program (MSP) as prevailing seed cotton market prices remain below MSP levels. Mill consumption has improved steadily but remains constrained at 23 million 480-lb. bales due to subdued demand in the domestic market.
Area and Production
Post estimates India’s cotton production at 29.3million 480-lb. bales (37.5million 170-kilogram bales/6.4million metric tons) for marketing year (MY) 2020/21 on an area of 13.3 million hectares. Post’s area estimate is 100,000 hectares lower than the official USDA estimate. Post has revised the area based on discussions with officials and contacts that signal an increase in cotton area since the first advance area estimates were published by the Ministry of Agriculture and Farmers Welfare’s (MOAFW) on October 1, 2020. Post’s production estimate is 200000 480 lb. bales lower than official USDA estimate. The impact of late excess rains and the increasing incidence of pest infestation will likely impact the yields. Accordingly, Post’s yield estimate has been adjusted which is on par with the official USDA estimate at 480 kilogramsper hectare.Local trade sources are estimating the MY 2020/21 crop at a lower level around 27-29 million 480 lb. bales based on the impact of excess rains in Gujarat and Telangana, and pest infestation in Maharashtra.
According to the Indian Meteorological Department (IMD), harvesting is underway in central and southern cotton growing states. In South Gujarat, which is four percent of total planted cotton area in the state, the late sown crop is at vegetative/boll formation stage, and farmers have been advised to follow integrated pest management practices for pink bollworm and sucking pest. Farmers have also been advised to continue picking the crop regularly under fair weather conditions and allow animals to graze on cotton fields after the last picking to prevent in festation. In Andhra Pradesh, farmers have been advised to avoid cotton picking during morning under fog which can reduce the quality of seed cotton. This is managed through shade drying of the harvested seed cotton in the field then bagging. While harvesting, farmers are being advised to take care regarding the mixing of dried squares and leaves with seed cotton, which can lead to dusky cotton bug attack, thereby reducing the crop quality.
Post has also revised MY 2019/20 area to 13.4 million hectares same as the fourth advance area estimates published by MOAFW. Accordingly, MY 2019/20 production has been revised to 29.5 million 480-lb. bales (37.8million 170-kilogram bales/6.4million metric tons) same as the official USDA estimate.
Minimum Support Price (MSP)ProcurementThe Cotton Corporation of India (CCI) continuesto procure seed cottonunder the minimum support price (MSP) program for Indian marketing year (Oct/Sep) 2020/21.Procurement operations of seed cotton (kapas) underMSP are actively underway in the states of Punjab, Haryana, Rajasthan, Madhya Pradesh, Maharashtra, Gujarat, Telangana, Andhra Pradesh, Odisha,and Karnataka.According to a recent press releaseby MOAFW, cotton procurement as of December 25, 2020 has reached 5.26 million 480-lb. bales (6.73 million 170-kilogram bales/1.14 MMT), valued at US$ 2.66 billion (INR 19,698 crore).Sources indicate that the cotton MSP procurement target is expected to be US$ 4.72 billion (INR 35,000 crores), however due to poor quality (shorter staple length) of the crop affected by rains and pest infestation, government agencies maylimit buying.Pace of Cotton Market Arrivals Remains HighAccording to CCI, new crop arrivals as of December 28 are estimated around 11.8million 480-lb. bales (15.1million 170-kilogram bales/2.6MMT).Based on historical CCI arrival data, the pace of arrivals remains quite brisk, however, trade sources indicate that overall arrivals might be 30-60 percent higher than reported. Farmers across India continue to deliver cotton to CCI for sale under the MSP program as private traders are limiting their purchases due to quality issues. However, farm gate prices in states such as Gujarat, Andhra Pradesh and Rajasthan have risen above MSP rates recently due to strong mill demand,StocksTrade sources estimate unsold stocks held by government agencies and private traders at 9.4 million 480-lb bales (12 million 170-kilogram bales/2 MMT).Trade sources indicate the stocks being held from MY 2019/20 season by government agencies (estimated at 3-4 million 170-kilogram bales) are of much higher quality than new crop arrivals. As such, mills are preferring the old crop; however, the sale prices being offered are much higher than the new crop so private traders/mills are limiting new crop purchases, while government agencies are looking to swiftly offload the new crop. Farm gate seed cotton prices have risen by 21 percent since the beginning of the Indian marketing year (Oct/Sep), and seven percent from previous month, however, prices still remain below the MSP rates, prompting farmers to prefer selling to government agencies, instead of private traders.
Post estimates MY 2020/21 cotton consumption at 23 million 480-lb bales (29.5 million 170-kilogram bales/5MMT).Post’s estimate is 1 million 480 lb. bales lower than the official USDA estimate. While the demand for cotton yarn and cotton fabric is being driven by strong export orders, the domestic market continues to remain subdued as the general public continue to work/stay at home, and lockdown measures limit consumer footfall, slowing down demand recovery. Consumers continue to be cautious and limit additional purchases as disposable incomes have been negatively affected. Similarly, cash flow is still stressed across the supply chain and producers are operating hand-to-mouth. A return to pre-COVID consumer demand levels may not occur until the second quarter of 2021. For the month of October 2020, the quick estimates of the Index of Industrial Production (IIP), indicate that the textile manufacturing sector witnessed 7.7 % negative growth in production volume compared to October 2019, highlighting ongoing contraction due to COVID-19. Cumulatively, Indian fiscal year 2020/21 (Apr/Oct) witnessed a 36 % decline as compared to 2019/20. However, it should be noted that the monthly index of textile production has been rising steadily since April onwards and has surpassed the base index value for past two months indicating growth. For more details please refer to Quick Estimates of IIP October 2020.
TradePost estimates MY 2020/21 exports at4.8 million 480-lb. bales (6.1million 170-kilogram bales/1 MMT).Post’s estimate is 200000 480-lb. bales lower than the official USDA estimate. Similar to the previous month, raw cotton shipments seem to be increasing, however the pace of recovery is slow and uncertain due to growing concerns about a resurgence of the COVID-19 cases in export markets. Since October, Indian ex-gin prices have risenby 13percent, slower thanCotlook A-Indexprices which increased by 16 %, much higher than pre-COVID price levels.The contraction in global demand is intensifying global competition, and Indian cotton, although discounted, may face increased competition from Brazil and Australia based on quality parameters. According to FAS analysis, raw cotton shipments in November were 53 % higher than the previous month. China (56 percent), Bangladesh (27 %), and Vietnam (12 %) were the top export destinations. The demand for value-based cotton textiles is driving the demand for Indian cotton exports.Indian cotton yarn prices have also risen by 20 % since October, driven by higher yarn demand mostly from China, Bangladesh, Peru, Portugal, andVietnam.Preliminary trade estimates published by the Ministry of Commerce indicate that cotton yarn shipments (by volume) in November were fourpercent higher than the previous month, however the shipments were one percent lower on a year over year basis. Cumulatively, in MY 2020/21,between August and November, cotton yarn shipments were 20 % higher than same period last year.Exports of cotton fabric are showing growth, as exports in November are three percent higher than previous month, and ten percent higher on a year over year basis. Cumulatively, in MY 2020/21 between August to November, cotton fabric shipments are six percent higher than same period last year. Provisional trade estimates published by the Ministry of Commerce indicate that exports of cotton yarn/fabrics/made-ups and handloom products were nine percent higher (by value) in November2020 as compared to the same period last year. However, the cumulative value of exports between April-November is lower by 13 %, compared to same period last year. Similarly, exports of readymade garments of all textiles is one percent lower in November compared to the same month last year, and the cumulative value of exports during April –November fell by 30 % compared to the same period last year. The impact of COVID-19 has not spared exports of man-made yarn/fabrics/made-ups, as they are down by 11 % in November compared to the same month last year, and 30 % from April-November 2020.Post estimates MY 2020/21 imports at 1 million 480-lb. bales (1.28 million 170-kilogram bales/218000 MT).Post’s estimate is the same as official USDA estimate. Post analysis indicates that November imports fell by more than nine percent from the previous month. In November, top cotton suppliers were the United States (44 %), Egypt (37 %), and Australia (7 %). Imports continue to remain slow due to availability of a large domestic crop, coupled with limited buying from mills. Post analysis indicates that almost 60 percent of total imports were shipped to ports in Southern India.
Swiss average annual inflation of –0.7 % in 2020
The consumer price index (CPI) fell by 0.1 % in December 2020 compared with the previous month, reaching 100.9 points (December 2015 = 100). Inflation was –0.8 % compared with the same month of the previous year. The average annual inflation reached –0.7 % in 2020. These are the results of the Federal Statistical Office (FSO).
The average annual inflation for 2020 corresponds to the rate of change between the annual average of the CPI for 2020 and that for 2019. The annual average is equal to the arithmetic mean of the 12 monthly indices of the calendar year. The average annual inflation reached –0.7 % in 2020. This decrease is due in particular to lower prices for international package holidays, petroleum products and for air transport. In contrast, prices for housing rentals and new cars increased. Prices for domestic products remained stable on average, those for imported products decreased by 2.9%. The average annual inflation reached +0.4 % in 2019 and +0.9 % in 2018.
The 0.1 % decrease compared with the previous month can be explained by several factors including falling prices for international package holidays. Medicines also recorded a price decrease, as did fruiting vegetables. In contrast, prices for heating oil and air transport increased.
Global Economy to expand by 4 % in 2021; Vaccine Deployment and Investment Key to sustaining the Recovery says Worldbank
Development risks remain as economic activity, incomes likely to stay low for extended period.
The global economy is expected to expand 4% in 2021, assuming an initial COVID-19 vaccine rollout becomes widespread throughout the year. A recovery, however, will likely be subdued, unless policy makers move decisively to tame the pandemic and implement investment-enhancing reforms, the World Bank says in its January 2021 Global Economic Prospects.
Although the global economy is growing again after a 4.3% contraction in 2020, the pandemic has caused a heavy toll of deaths and illness, plunged millions into poverty, and may depress economic activity and incomes for a prolonged period. Top near-term policy priorities are controlling the spread of COVID-19 and ensuring rapid and widespread vaccine deployment. To support economic recovery, authorities also need to facilitate a re-investment cycle aimed at sustainable growth that is less dependent on government debt.
“While the global economy appears to have entered a subdued recovery, policymakers face formidable challenges—in public health, debt management, budget policies, central banking and structural reforms—as they try to ensure that this still fragile global recovery gains traction and sets a foundation for robust growth,” said World Bank Group President David Malpass. “To overcome the impacts of the pandemic and counter the investment headwind, there needs to be a major push to improve business environments, increase labour and product market flexibility, and strengthen transparency and governance.”
The collapse in global economic activity in 2020 is estimated to have been slightly less severe than previously projected, mainly due to shallower contractions in advanced economies and a more robust recovery in China. In contrast, disruptions to activity in the majority of other emerging market and developing economies were more acute than expected.
“Financial fragilities in many of these countries, as the growth shock impacts vulnerable household and business balance sheets, will also need to be addressed,” Vice President and World Bank Group Chief Economist Carmen Reinhart said.
The near-term outlook remains highly uncertain, and different growth outcomes are still possible, as a section of the report details. A downside scenario in which infections continue to rise and the rollout of a vaccine is delayed could limit the global expansion to 1.6 % in 2021. Meanwhile, in an upside scenario with successful pandemic control and a faster vaccination process, global growth could accelerate to nearly 5 percent.
In advanced economies, a nascent rebound stalled in the third quarter following a resurgence of infections, pointing to a slow and challenging recovery. U.S. GDP is forecast to expand 3.5 % in 2021, after an estimated 3.6 % contraction in 2020. In the euro area, output is anticipated to grow 3.6 % this year, following a 7.4 % decline in 2020. Activity in Japan, which shrank by 5.3 % in the year just ended, is forecast to grow by 2.5 % in 2021.
Aggregate GDP in emerging market and developing economies, including China, is expected to grow 5 % in 2021, after a contraction of 2.6 % in 2020. China’s economy is expected to expand by 7.9 % this year following 2 % growth last year. Excluding China, emerging market and developing economies are forecast to expand 3.4% in 2021 after a contraction of 5 % in 2020. Among low-income economies, activity is projected to increase 3.3 % in 2021, after a contraction of 0.9 % in 2020.
Analytical sections of the latest Global Economic Prospects report examine how the pandemic has amplified risks around debt accumulation; how it could hold back growth over the long term absent concerted reform efforts; and what risks are associated with the use of asset purchase programs as a monetary policy tool in emerging market and developing economies.
“The pandemic has greatly exacerbated debt risks in emerging market and developing economies; weak growth prospects will likely further increase debt burdens and erode borrowers’ ability to service debt,” World Bank Acting Vice President for Equitable Growth and Financial Institutions Ayhan Kose said. “The global community needs to act rapidly and forcefully to make sure the recent debt accumulation does not end with a string of debt crises. The developing world cannot afford another lost decade.”
As severe crises did in the past, the pandemic is expected to leave long lasting adverse effects on global activity. It is likely to worsen the slowdown in global growth projected over the next decade due to underinvestment, underemployment, and labour force declines in many advanced economies. If history is any guide, the global economy is heading for a decade of growth disappointments unless policy makers put in place comprehensive reforms to improve the fundamental drivers of equitable and sustainable economic growth.
Policymakers need to continue to sustain the recovery, gradually shifting from income support to growth-enhancing policies. In the longer run, in emerging market and developing economies, policies to improve health and education services, digital infrastructure, climate resilience, and business and governance practices will help mitigate the economic damage caused by the pandemic, reduce poverty and advance shared prosperity. In the context of weak fiscal positions and elevated debt, institutional reforms to spur organic growth are particularly important. In the past, the growth dividends from reform efforts were recognized by investors in upgrades to their long-term growth expectations and increased investment flows.
Central banks in some emerging market and developing economies have employed asset purchase programs in response to pandemic-induced financial market pressures, in many cases for the first time. When targeted to market failures, these programs appear to have helped stabilize financial markets during the initial stages of the crisis. However, in economies where asset purchases continue to expand and are perceived to finance fiscal deficits, these programs may erode central bank operational independence, risk currency weakness that de-anchors inflation expectations, and increase worries about debt sustainability.
East Asia and Pacific: Growth in the region is projected to accelerate by 7.4 % in 2021. For more, see regional overview.
Europe and Central Asia: The regional economy is forecast to grow by 3.3 % this year. For more, see regional overview.
Latin America and the Caribbean: Regional economic activity is expected to grow by 3.7 % in 2021. For more, see regional overview.
Middle East and North Africa: Economic activity in the Middle East and North Africa is forecast to advance by 2.1 % this year. For more, see regional overview.
South Asia: Economic activity in the region is projected to expand by 3.3 % in 2021. For more, see regional overview.
Sub-Saharan Africa: Economic activity in the region is on course to rise by 2.7 % in 2021 For more, see regional overview.
World Bank Group COVID-19 Response
The World Bank Group, one of the largest sources of funding and knowledge for developing countries, is taking broad, fast action to help developing countries strengthen their pandemic response. It is supporting public health interventions, working to ensure the flow of critical supplies and equipment, and helping the private sector continue to operate and sustain jobs. The Bank Group is making available up to USD 160 billion over a 15-month period ending June 2021 to help more than 100 countries protect the poor and vulnerable, support businesses, and bolster economic recovery. This includes $50 billion of new IDA resources through grants and highly concessional loans and USD12 billion for developing countries to finance the purchase and distribution of COVID-19 vaccines.
Germany’s Textile and Clothing sectors do not profit from positive impulses from the industrial sector.
Turnovers and occupation are also decreasing in October 2020, particularly the clothing segment suffers from the consumer restrictions, but also textiles are missing impulses from the slowly recuperting industrial sector, occupation is continuing to sink. The economic survey of ifo shows a slight increase of the economic development, but do remain behind the total German industrial sector. All in all there is to note another drop because of the consumer nearness of the two sectors at the end of 2020. From the exports there are practically no positive signs.
October does not show a marked improvement at turnovers: All of the comparison with 2019 are negative. In total the enterprises had to accept in the first 10 months of 2020 a dercrease in turnovers of 12.7 %. (textiles -9.0 %, clothing – 18.7 %). The remaining two moths of the year will not show a trend change, particularly the clothing sector, because the lockdown measures markedly hurt the special retail sector in December 2020. Stocks are plentiful and there is no sign in 2021 when a trend change should take place. However, textiles could probably profit from an upward trend of the total German industry, however the necessary signs are missing for an upturn.
Jobs are increasingly degressive, particularly in the clothing sector. There were at the end October 2020 10.6 % less persons occupied as to compare to end of October 2019. Textiles shows also a minus of 5.3 % jobs, resulting until the end of October 2020 that 7.0 % less human beings were employed in the two sectors. Short time and temporarily dormant employment relationships are not included in these figures.
Domestic production is also markedly and steadily decreasing. Per October the drop in the textile sector amounts to -10.9 % and for clothing -21.1 %. Order inflow are also continuing to decline, however not so strongly as in the first semester of 2020. They remain negative not allowing a sign of a trend change. Per October textiles had -9.9 % less order intake and clothing -13.6 %. Production prices show only light changes.
Total turnover of the special retail sector shows in October no improvement. The monthly turnover figures drop again by -6.9 %, leading to the conclusion that the retail sector shows for October a minus of 22.6 % in turnovers. By contrast total German retail sector increased by 5.2 %.
The situation in external trade is also negative, but in view to turnover, the export sector as against domestic sales, shows some improvement. The clothing sector exports in the first 10 months of 2020 -8.5 %, and textiles -5.1 %. Imports are dominated by face and protection masks and similar articles, leading in October to an import increase by +52. 1 %. The import of clothing sank in October by 8.0 %.
The import surplus increases and per October by +44.4 %. Raw material imports sink in comparison to 2019 by 21.6 %.
ifo-Economic Development Survey
The Survey results of the December 2020 total German industrial sector are increasing markedly, including textiles and clothing, but not as decisive as for the German manufacturing sector. The later shows a very positive forecast, not taking place anymore since January 2020. Since the lockdown measures in December 2020 and the economic development forecast there will be no soon trend change in the sectors of textiles and clothing. The nearness to consumers of the two sectors, decouples them from the actual positive development of the German industry.
November 2020 compared with October 2020 Industrial Producer Prices up by 0.4 % in both Euro Area and EU
In November 2020, industrial producer prices rose by 0.4 % in both the euro area and the EU, compared with October 2020, according to estimates from Eurostat, the statistical office of the European Union. In October 2020, prices increased by 0.4 % in the euro area and by 0.3 % in the EU.
In November 2020, compared with November 2019, industrial producer prices decreased by 1.9 % in the Euro Area, and by 1.8 % in the EU.
Monthly comparison by main industrial grouping and by Member State
Industrial producer prices in the euro area in November 2020, compared with October 2020, increased by 1.3% in the energy sector, by 0.3% for intermediate goods and by 0.1 % for durable consumer goods, while prices remained stable for capital goods and non-durable consumer goods. Prices in total industry excluding energy increased by 0.1 %.
In the EU, industrial producer prices increased by 1.4 % in the energy sector, and by 0.2 % for intermediate goods and durable consumer goods, while prices remained stable for non-durable consumer goods and decreased by 0.1 % for capital goods. Prices in total industry excluding energy increased by 0.1 %.
The highest increases in industrial producer prices were recorded in Denmark and France (both +1.7%), Estonia (+1.2%) and Romania (+1.1%), while the largest decreases were observed in Ireland (-1.4%), Slovakia (-0.7%) and Czechia (-0.5%).
Annual comparison by main industrial grouping and by Member State
Industrial producer prices in the euro area in November 2020, compared with November 2019, decreased by 7.5 % in the energy sector, by 0.6 % for intermediate goods and by 0.1 % for non-durable consumer goods, while prices rose by 0.8 % for capital goods and by 1.2 % for durable consumer goods. Prices in total industry excluding energy remained stable.
In the EU, industrial producer prices decreased by 7.5 % in the energy sector and by 0.5 % for intermediate goods, while prices rose by 0.1 % for non-durable consumer goods, by 0.9 % for capital goods and by 1.5 % for durable consumer goods. Prices in total industry excluding energy increased by 0.2 %.
The largest decreases in industrial producer prices were observed in Lithuania (-7.3 %), Greece (-6.8 %) and Cyprus (-6.1 %), while the only increases were recorded in Malta (+1.8 %), Hungary and Slovenia (both +1.1 %).
The euro area (EA19) includes Belgium, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland.
The European Union (EU27) includes Belgium, Bulgaria, Czechia, Denmark, Germany, Estonia, Ireland, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Hungary, Malta, the Netherlands, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland and Sweden.
Methods and definitions
The index of producer prices shows (in the national currency of the country concerned) changes in the ex-works sale prices of all products sold on the domestic market, excluding imports. Euro area and EU indices refer to overall weighted price changes. The figures are not calendar day or seasonally adjusted.
Total industry covers NACE rev.2 sections B to D + E36.
November 2020 compared with October 2020 Volume of retail trade down by 6.1 % in Euro Area, by 5.0 % in EU
In November 2020, the COVID-19 containment measures introduced again by several Member States had a significant impact on retail trade, as the seasonally adjusted volume of retail trade fell by 6.1% in the euro area and by 5.0% the EU, compared with October 2020, according to estimates from Eurostat, the statistical office of the European Union. In October 2020, the retail trade volume rose by 1.4% in both the euro area and in the EU.
In November 2020 compared with November 2019, the calendar adjusted volume of retail trade decreased by 2.9 % in the Euro Area and by 2.0 % in the EU.
Monthly comparison by retail sector and by Member State
In the euro area in November 2020, compared with October 2020, the volume of retail trade decreased by 10.6% for automotive fuels, by 8.9 % for non-food products (within this category mail orders and internet increased by 1.8 %) and by 1.7 % for food, drinks and tobacco. In the EU, the volume of retail trade decreased by 7.7 % for automotive fuels, by 7.3 % for non-food products (mail orders and internet +2.3 %) and by 1.5 % for food, drinks and tobacco.
Among Member States for which data are available, the largest decreases in the total retail trade volume were observed in France (-18.0 %), Belgium (-15.9 %) and Austria (-9.9 %). The highest increases were registered in the Netherlands (+2.6 %), Croatia (+2.5 %) and Germany (+1.9 %).
Annual comparison by retail sector and by Member State
In the euro area in November 2020, compared with November 2019, the volume of retail trade decreased by 18.0 % for automotive fuels and by 5.2 % for non-food products (within this category mail orders and internet increased by 32.0 %), while food, drinks and tobacco increased by 2.7 %. In the EU, the retail trade volume decreased by 15.3 % for automotive fuels and by 3.3 % for non-food products (mail orders and internet +32.9%), while food, drinks and tobacco increased by 2.4 %.
Among Member States for which data are available, the largest yearly decreases in the total retail trade volume were registered in France (-15.7 %), Slovenia (-14.2 %) and Belgium (-11.7 %). The highest increases were observed in Germany (+8.8 %), Denmark (+8.7 %) and the Netherlands (+6.6 %),
The Euro Area (EA19) includes Belgium, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland.
The European Union (EU27) includes Belgium, Bulgaria, Czechia, Denmark, Germany, Estonia, Ireland, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Hungary, Malta, the Netherlands, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland and Sweden.
Methods and definitions
The index of the volume of retail trade measures the evolution of the turnover in retail trade, adjusted for price changes (deflated), i.e. the evolution of the total amount of goods sold, based on data adjusted for calendar and seasonal effects.
Seasonal adjustment is a statistical method for removing the effects of recurring seasonal influences, which have been observed in the past from an economic time series, thus showing non-seasonal trends more clearly. Calendar adjustment is a statistical method for removing the variation caused by the changing number of particular weekdays or holidays in different months or other time periods (quarters, years). The annual comparisons are based on data adjusted for calendar effects only.
Seasonally adjusted euro area and EU series are calculated by aggregating the seasonally adjusted national data. Eurostat carries out the seasonal adjustment of the data for those countries that do not adjust their data for seasonal effects.
Missing observations from Member States for recent months are estimated for the calculation of the euro area and the EU aggregates.
Turnover in the Swiss retail sector increased by 1 % in November 2020
Turnover adjusted for sales days and holidays rose in the retail sector by 1.0 % in nominal terms in November 2020 compared with the previous year. Seasonally adjusted, nominal turnover fell by 2.4 % compared with the previous month. These are the provisional findings from the Federal Statistical Office (FSO).
Real turnover adjusted for sales days and holidays rose in the retail sector by 1.7 % in November 2020 compared with the previous year. Real growth takes inflation into consideration. Compared with the previous month, real, seasonally adjusted retail trade turnover registered a decline of 2.0 %.
Retail sector excluding service stations
Adjusted for sales days and holidays, the retail sector excluding service stations showed a 2.7 % increase in nominal turnover in November 2020 compared with November 2019 (in real terms +3.2 %). Retail sales of food, drinks and tobacco registered an increase in nominal turnover of 8.3 % (in real terms +7.7 %), whereas the non-food sector registered a nominal negative of 1.7 % (in real terms -0.4 %).
Excluding service stations, the retail sector showed a seasonally adjusted decline in nominal turnover of 2.4 % compared with the previous month (in real terms -2.1 %). Retail sales of food, drinks and tobacco registered a nominal minus of 0.3 % (in real terms +0.1 %). The non-food sector showed a minus of 3.2 % (in real terms -2.7 %).
Flash estimate – December 2020 Euro Area annual inflation stable at -0.3%
Euro area annual inflation is expected to be -0.3% in December 2020, stable compared to November according to a flash estimate from Eurostat, the statistical office of the European Union.
Looking at the main components of euro area inflation, food, alcohol & tobacco is expected to have the highest annual rate in December (1.4 %, compared with 1.9 % in November), followed by services (0.7 %, compared with 0.6 % in November), non-energy industrial goods (-0.5%, compared with -0.3% in November) and energy (-6.9 %, compared with -8.3 % in November).
The Euro Area consists of Belgium, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland.
The euro area data refer to the country composition at a specific point in time. Changes in the composition of the euro area are incorporated using a chain index formula.
Methods and definitions
Annual inflation is the change of the price level between the current month and the same month of the previous year. Monthly inflation is the change of the price level between the current month and the previous month.
Data collection for HICP has been affected by the COVID-19 crisis in all euro area countries. Eurostat and the Member States’ national statistical institutes have agreed a set of procedures to estimate prices that could not be collected due to mobility restrictions or closures of outlets. All information about these procedures is available on the Eurostat website section on inflation.
Euro Area Inflation annual
Euro Area Inflation +Components
U.S. lost 140000 jobs in December as the economy sputtered
The U.S. lost 140000 jobs in December, the first drop in employment since April, as the economy began to backslide amid a resurgent pandemic.
By guest author Ben Casselman from the New York Times
U.S. lost 140000 jobs in December, the first decline since April.
The new year would not bring much relief, at least right away. The virus is still raging out of control, leading cities and states to reimpose restrictions on businesses and leading consumers to pull back on activities that could put them at risk. Many forecasters expect more weak economic data for January and February.
The already sputtering economic rebound went into reverse in December, as employers laid off workers amid rising coronavirus cases and waning government aid.
U.S. employers cut 140000 jobs in December, the Labour Department said Friday, January 8, 2021. It was the first net decline in payrolls since last spring’s mass layoffs, and though the December loss was nowhere near that scale, it represented a discouraging reversal for the once-promising recovery. The U.S. economy still has about 10 million fewer jobs than before the pandemic began.
The December losses were heavily concentrated in leisure and hospitality businesses, which have been hit especially hard by the pandemic. The industry cut nearly half a million jobs in December, while sectors less exposed to the pandemic continued to add workers.
The unemployment rate was unchanged at 6.7 percent, down sharply from its high of nearly 15 % in April but still close to double the 3.5 percent rate in the same month a year earlier.
The new year won’t bring much relief, at least right away. The virus is still raging out of control, leading cities and states to reimpose restrictions on businesses and leading consumers to pull back on activities that could put them at risk. Many forecasters expect more weak economic data for January and February.
“I can’t see that the labour market is going to get a whole lot better until we get the pandemic under control,” said Erica Groshen, a Cornell University economist and a former commissioner of the Bureau of Labour Statistics.
The December data, the last of President Trump’s time in office, marks the end of a year of violent swings in the labour market. Employers cut 22 million jobs in March and April, then began rehiring furloughed workers en masse in May and June. By August, the economy had regained close to half of the lost jobs.
But momentum soon faded. Hiring has slowed every month since June, and the economy lost about nine million jobs in 2020 as a whole, the first calendar-year decline since 2010 and the worst on a percentage basis since the aftermath of World War II.
Congress last month passed a $900 billion relief package that will provide temporary support to households and businesses and could give a boost to the broader economy. And in the longer run, the arrival of coronavirus vaccines should allow the return of activity that has been suppressed by the pandemic.
But the vaccine and the aid came too late to prevent a sharp slowdown in growth.
“We did have a pullback in the economy,” said Michelle Meyer, head of U.S. economics at Bank of America. “If stimulus was passed earlier, maybe that could have been avoided.”
The lost winter could have lasting implications. Temporary furloughs have increasingly turned into permanent layoffs as the pandemic has dragged on, and tens of thousands of small businesses have closed for good. Millions have joined the ranks of the long-term unemployed, and in recent months many have been leaving the labour force.
U.S. lost 140000 jobs in December as the economy sputtered
November 2020 Euro Area unemployment at 8.3 %, EU at 7.5 %
In November 2020, the Euro Area seasonally-adjusted unemployment rate was 8.3 %, down from 8.4 % in October 2020 and up from 7.4% in November 2019. The EU unemployment rate was 7.5 % in November 2020, down from 7.6 % in October 2020 and up from 6.6 % in November 2019. These figures are published by Eurostat, the statistical office of the European Union.
Eurostat estimates that 15933 million men and women in the EU, of whom 13609 million in the Euro Area, were unemployed in November 2020. Compared with October 2020, the number of persons unemployed decreased by 222000 in the EU and by 172000 in the euro area. Compared with November 2019, unemployment rose by 1795 million in the EU and by 1.425 million in the Euro Area.
In November 2020, 3171 million young persons (under 25) were unemployed in the EU, of whom 2629 million were in the euro area. In November 2020, the youth unemployment rate was 17.7 % in the EU and 18.4 % in the Euro Area, up from 17.5 % and 18.0% respectively in the previous month. Compared with October 2020, youth unemployment increased by 51000 in the EU and by 64000 in the euro area. Compared with November 2019, youth unemployment increased by 456000 in the EU and by 398000 in the Euro Area.
Unemployment by gender
In November 2020, the unemployment rate for women was 7.9% in the EU, down from 8.0% in October 2020. The unemployment rate for men was 7.1% in November 2020, down from 7.2% in October 2020. In the euro area, the unemployment rate for women decreased from 8.9% in October 2020 to 8.8% in November 2020 and from 8.0% to 7.9% for men.
Additional labour market indicators
These estimates are based on the globally used International Labour Organisation standard definition of unemployment, which counts as unemployed people without a job who have been actively seeking work in the last four weeks and are available to start work within the next two weeks. The COVID-19 outbreak and the measures applied to combat it have triggered a sharp increase in the number of claims for unemployment benefits across the EU. At the same time, a significant part of those who had registered in unemployment agencies were no longer actively looking for a job or no longer available for work, for instance, if they had to take care of their children. This leads to discrepancies in the number of registered unemployed and those measured as unemployed according to the ILO definition.
To capture in full the unprecedented labour market situation triggered by the COVID-19 outbreak, the data on unemployment have been complemented by additional indicators, e.g. underemployed part-time workers, persons seeking work but not immediately available and persons available to work but not seeking, released together with LFS data for the second quarter of 2020. The LFS data for the third quarter 2020 will be released on January 11, 2021.Youth unemployment.
Euro area (EA19): Belgium, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland.
European Union (EU27): Belgium, Bulgaria, Czechia, Denmark, Germany, Estonia, Ireland, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Hungary, Malta, the Netherlands, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland and Sweden.
Methods and definitions
Eurostat publishes harmonised unemployment rates for individual EU Member States, the euro area and the EU. These unemployment rates are based on the definition recommended by the International Labour Organisation (ILO). The measurement is based on a harmonised data source, the European Union Labour Force Survey (LFS).
Based on the ILO definition, Eurostat defines unemployed persons as persons aged 15 to 74 who:
– are without work;
– are available to start work within the next two weeks;
– and have actively sought employment at some time during the previous four weeks.
The unemployment rate is the number of people unemployed as a percentage of the labour force.
Series have been seasonally adjusted using the seasonal factors estimated in the period up to December 2019 included. Those seasonal factors will be kept unchanged (‘controlled concurrent adjustment method’) until the impact of the COVID-19 outbreak can be integrated in seasonal adjustment models.
The labour force is the total number of people employed plus unemployed. In this news release unemployment rates are based on employment and unemployment data covering persons aged 15 to 74.
The youth unemployment rate is the number of people aged 15 to 24 unemployed as a percentage of the labour force of the same age. Therefore, the youth unemployment rate should not be interpreted as the share of jobless people in the overall youth population.
When data for the most recent month are not available for a Member State, EU and EA aggregates are calculated using the latest data available for that Member State.
Germany, the Netherlands, Austria, Finland, Sweden and Iceland: the trend component is used instead of the more volatile seasonally adjusted data.
Denmark, Estonia, Hungary, Portugal, the United Kingdom and Norway: 3-month moving averages of LFS data are used instead of pure monthly indicators.
Germany: due to the introduction of the new German system of integrated household surveys, including the LFS, the monthly unemployment rate for November 2020 is an estimation based on the figures recorded in previous periods, taking into account current developments.
3 Tabs seasonally adj
FTAs, speedy custom clearances can boost India’s denim fabric exports
India is one the largest exporters of denim fabric in the world. Data from Astute Consulting indicates, India’s denim fabric exports grew at 8 per cent CAGR from 2016-2020. A major part of this growth came from poly denim fabric exports which grew at phenomenal 23 per cent CAGR in these five years. On the other hand, exports of cotton denim fabric stagnated during this period.
The growing popularity of poly denim fabrics can be attributed to increasing affinity for stretch fabrics amongst consumers, superior qualities like better stretch, retraction, and lower distortion as compared to cotton denims, discomfort caused by polyester fabrics, and the inability of consumers to differentiate between poly denim and polyester fabrics.
Bangladesh, India’s largest denim importer
India exports denim fabrics to many countries including Bangladesh, Columbia, Egypt, Sri Lanka, etc. Among them Bangladesh makes up almost 50 perFTAs speedy custom clearances can boost Indias denim fabric exports cent of total denim exports as Bangladesh’s FTA with the European Union gives India roughly 10 % duty advantage on garment FOB prices. Also, Bangladesh offers very competitive fabric to garment conversion rates due to low labour costs. Flexible labour laws enable garment factories to offer large economies of scale and lastly, India’s proximity to Bangladesh enables it to export goods by roads, thus reducing lead times.
Local denim mills and delayed custom clearances impede exports
Despite these benefits, denim fabrics export to Bangladesh has dropped over the last few years as Bangladesh is setting up fabric manufacturing capacities on a large scale. These denim fabric mills are much younger than India and more technologically advanced. They have highly productive manufacturing setups compared to the majority of Indian denim mills and produce similar quality fabrics. Also, land customs border to Bangladesh through West-Bengal is inefficient and often delays custom clearances.
To improve denim fabrics exports, the Indian government needs to sign a textile specific FTA with the EU and the US. This will improve the competitiveness of its textile exports and bring them on part with other countries like Bangladesh, Sri Lanka, Pakistan, Egypt, Colombia, etc.
Larger factories and labour laws to improve shipments
The government should ensure speedy custom clearances of export shipments through the Bengal land border. Movement of consignments through river transport should also be considered. It should encourage manufacturers to set up large factories that offer economies of scale and improve productivity and cost competitiveness of garment manufacturing in the country.
The government also needs to abolish archaic and rigid labour laws that discourage it from setting up large scale factories and set up plants similar to those built in China, Bangladesh, and Sri Lanka. The government also needs to revamp its land and labour laws and introduce a new FTA with the EU and US.
Southern Virginia to Open USD 25.5 million Manufacturing Centre with 3D Printing
By guest author Michael Molitch-Hou from 3D Printing
Photo Centre Mfr
Ground was just broken for a new facility in Southern Virginia. The Center for Manufacturing Advancement (CMA) will be a 51,250-square-foot site meant to allow manufacturing companies to grow and bring business to the region. Funded by the state of Virginia and the Danville Regional Foundation, the USD 25.5 million project will be located on the campus of the Institute for Advanced Learning and Research (IALR) and will feature 3D printing, among other manufacturing technologies.
With the press release announcing the groundbreaking of the project, numerous representatives spoke about the need to develop Southern Virginia economically, while encouraging the development of new manufacturing technologies. The CMA represents the state’s desire to improve the manufacturing ecosystem of Southern Virginia using facilities that will make it possible for new businesses to begin operating while they establish more extensive factories of their own.
“Southern Virginia is a top location for advanced manufacturers from across the globe, and the Center for Manufacturing Advancement will undoubtedly help attract more of them to the region,” said Governor Ralph Northam. “This state-of-the-art facility will play an important role in driving economic development and innovation in Virginia, while also helping the existing Danville-Pittsylvania business community grow and thrive.”
With that in mind, the site will include an ISO-certified inspection lab that makes it possible to perform quality control, thus reducing the four-to-six-month start-up phase for new companies as they certify their products. It will also include process improvement labs for new and established businesses to improve their production more quickly so that they can better compete globally.
Among the stakeholders in the project is the Phillips Corporation. Not to be confused with the Dutch multinational, Royal Philips, the Maryland-based Phillips Corporation is a supplier of manufacturing technology. It boasts a growing additive division that includes the sale of EOS metal 3D printers. This summer, the Federal Division of the Phillips Corporation, which distributes and provides service for machines and other ancillary equipment to the United States Federal Government and the DoD, entered into a Public Private Partnership Agreement with the U.S. Army and began working with Australia’s SPEE3D technology with the U.S. Navy. Now, Phillips has announced that it will be housing some operations at the new CMA site.
“We are excited to announce Phillips’ commitment to locate our next manufacturing solutions innovation centre at IALR’s new CMA building in 2022,” said Alan Phillips, President/CEO of Phillips Corporation. “This commitment is a natural and continuing extension of our long-standing training and manufacturing technology collaborations with ILAR. We believe there are substantial and immediate needs to develop additive and subtractive manufacturing technologies to support expansion of the USA’s manufacturing competitiveness as well as to strengthen the capacity and capabilities of our Defence Industrial Base. We are very pleased to continue our partnerships with IALR, the Danville community, and the Southern Virginia academic and business community, with a common mission to develop outstanding training and manufacturing technology resources.”
As a part of the state government, the IALR is meant to be an organization dedicated to driving economic transformation in the region via research, education, manufacturing and other operations. To do so, it works with Virginia Tech, Danville Community College and Averett University.
The CMA will be located on the IALR campus adjacent to the new Kyocera SGS Tech Hub facility, a site established by KYOCERA SGS Precision Tools (KSPT) to focus on custom cutting tools and new technologies. As a division of the large Japanese conglomerate, Kyocera Corporation, which has a market cap of USD 22.4 billion, it should have hefty backing from its parent company to explore new methods of making custom cutting tools.
3D printing aficionados should understand the implications, as 3D printing is increasingly used to manufacture new cutting tools and particularly excels at custom parts. For this reason and more, SmarTech Analysis projects in its “Market Opportunities for Additive Manufacturing in the General Industry and Tooling Sector-2020-2029” report that the general industry and tooling market for additive manufacturing could reach USD 5.48 Billion by 2029.
Obviously, any synergy between Kyocera and the CMA will just be a small part of the larger operations of the new site. Altogether, it seems as though the CMA is almost a state and regional version of the advanced manufacturing hubs initiated under the Obama administration. When the facility opens in 2022, we’ll have a better idea of what will occur there and its potential impact on the region.