In January and February, customer demand in the U.S. grew by 55%, but has declined in recent months according to the growth of inventories, said representatives of companies in the textile zones.
The situation has led to a reduction of staff - earlier this year there were 110,000 employees in businesses in the sector, confirmed Dean Garcia, executive director of the Nicaraguan Association of Textile and Apparel companies (Anitec).
Garcia said that orders have been received orders from Brazil, for some 20,000 items, but because Brazilian tariffs push up costs, they have asked that the Ministry of Development, Industry and Trade expedites the signing of the Latin American Integration Association (ALADI) protocols, where list of priority products to market are established.
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The reactivation of the Comisión Aduanera de Zonas Francas (Customs Free Zone Comission) will speed up the processing of this sector's imports and exports.
The executive director of the Nicaraguan Association of Textiles, Anitec, Dean Garcia Foster, said that in addition to streamlining procedures it will also create savings in operating costs.
Millknit Industries will begin operations in early 2013, producing fabrics for clothing companies established in the free zones.
Following the closure of Core Denim in 2009, Nicaragua has had no cloth production, which is a disadvantage for the clothing sector, which has to import its raw materials.
In January, textile exports under free zone regime grew by 26.3% in value compared to January 2010.
According to information from the Nicaraguan Association of Textiles and Apparel (Anitec) during the same month last year the increase in volume was 25%, totaling 25.6 million square meters (unit of measurement for clothing), figure which even exceeds the January 2007 exports (21.2 million square meters) before the financial crisis.
The Free Zone industry lost 19000 jobs, but there is some hope that some will be recovered as a Mexican Consortium could replace at least 9600 jobs.
The figures were estimated by Dean Garcia, a representative of the Nicaraguan Textile Manufacture Industry, Anitex.
He said that the C&C Mexican investors bought three of the companies from Nien Hsing, that are set up in the Las Mercedes free zone.