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Pakistan's once-booming textile industry struggles to bounce

back
FAISALABAD, Jan. 8 (AFP)
As Pakistan slowly emerges from a long-term power crisis, its once booming textile sector is
scrambling to find its feet -- but high energy costs and a decade lost to competitors mean
recovery is far from assured.
Energy production was severely depressed for more than 10 years due to chronic underinvestment, inefficiencies in the power network and an inability to collect sufficient revenue to
cover costs. The result was crippling for manufacturers and in particular the textile sector, which
employs 30 percent of the working population.
Pakistan is the world's fourth largest cotton producing country but interminable power and
gas cuts have stopped exporters from producing their orders on time. Many have watched
helplessly as their clients have instead turned to Vietnam or Bangladesh.
A third of the production capacity of the sector has disappeared, thousands of factories have
closed, and most of the others are running below full capacity, says Rehan Bharara, a former
loom owner who now runs a public infrastructure project for the textile industry.
Half the time, "we had to run our factories on diesel generators, which was very expensive.
We decided to close down rather than losing money every day," he said. Only those
manufacturers which invested heavily in their own energy production survived.
These include plants run by the Sadaqat company, which provides house linen to major
Western retailers such as Debenhams, Tesco and Target. Energy supply to huge printing, cutting
and sewing departments is rotated according to need.
"We have three sources of electricity: the main and cheapest one is generation through gas, if
we don't have gas, we go to Wapda (the public utility), if Wapda closes, we go to diesel
generators," says chairman Mukhtar Ahmed. "I have no choice. If I stop producing, we lose our
customers."
Smaller plants, notably the hundreds of thousands of cotton loom workshops, lack backup
generators and are dependent on the public network.

German industry output up, exports soar in November


BERLIN, Jan. 9 (Reuters)
German industrial production rose for the second consecutive month in November and
exports jumped more than expected, data showed on Monday, boosting expectations for a
rebound in Europe's biggest economy in the fourth quarter.
Industrial output edged up by 0.4 percent on the month, data from the Economy Ministry
showed. This was slightly weaker than the consensus forecast in a Reuters poll for a rise of 0.6
percent.
The increase was driven by a 1.5 percent jump in construction output, the strongest monthly
gain since February. Manufacturing production was up 0.4 percent while energy output fell 0.4
percent. The October reading was revised up to a rise of 0.5 percent from a previously reported
rise of of 0.3 percent.
Separate data released from the Federal Statistics Office showed on Monday that seasonally
adjusted exports rose by 3.9 percent on the month. This was the strongest monthly gain since
May 2012 and came in better than the consensus forecast in a Reuters poll for a rise of 0.5
percent. Imports increased by 3.5 percent which was the strongest monthly rise since June 2014
and also much stronger than a predicted increase of only 0.2 percent.
The seasonally adjusted trade surplus widened to 21.7 billion euros ($22.86 billion) from
20.6 billion euros in October. The November reading was above the Reuters consensus forecast
of 21.2 billion euros.

Euro-Area Unemployment Holds at 7-Year Low as Growth


Strengthens
BRUSSELS, Jan. 9 (Bloomberg)
Euro-area unemployment remained at the lowest level in more than seven years in
November,
in
a
sign
that
the
regions
economy
is
strengthening.
Joblessness held at 9.8 percent, the European Unions statistics office in Luxembourg said on
Monday. Thats in line with economists estimates in a Bloomberg survey.
Unemployment has been decreasing steadily from a peak of 12.1 percent reached in 2013 as
the European Central Bank deployed unprecedented stimulus to rekindle growth and fuel
inflation. Economic confidence surged to the highest level in more than five years in December,
suggesting companies and households expect the recovery to continue in a year of political
uncertainty.
The unemployment rate should continue to decline in the coming months, said Holger
Sandte, chief European analyst at Nordea Markets in Copenhagen. Sentiments indicators look
pretty decent and unless politics gets in the way then the chances are not that bad for the labor
market.
The lowest unemployment rate in the region -- 4.1 percent -- was recorded in Germany, while
joblessness in Spain was 19.2 percent, according to the report. In Greece, 23.1 percent were out
of work in September, the latest month for which data are available.